“Arctic’s energy” line waits for the construction

Although considered a difficult project because of the climate conditions and geographical position, the Russian authorities gave the green light to Northern Latitudinal Railway project, also called “Arctic’s energy”, that will provide access to the natural resources of Russia’s northernmost areas, including to Sabetta Port, will change transport routes and will boost the economic growth of Yamal-Nenets Autonomous Area.

The new railway will connect Severnaya and Sverdlovskaya railways by significantly reducing the transport routes between the northern areas of Western Siberia and the ports of Baltic, White, Barents and Kara Seas.
The railway will be built on Obskaya – Salekhard – Nadym – Pangody – Novy Urengoy – Korotchaevo route, Obskaya – Bovanenkovo section, built by Gazprom, the northernmost railway in the world. The route includes a railway with a total length of 707 km of which 395 km of railway need to be built, while the remaining 312 km should be reconstructed. The project also includes the construction of a terminal.
In order to develop the project, the authorities of Yamal-Nenets Autonomous Area and Russia Railways have signed the agreement for the joint implementation of the line construction through which RZD will be responsible for the reconstruction of Pangody – Novy Urengoy – Korotchaevo section, while local administration will deal with the construction of the bridge across Ob River. “For Russian Railways, it will be the first project under the concession scheme. In fact, the company is making a real step in the direction of public-private partnership in the construction of railway infrastructure,” RZD’s president Oleg Belozerov said.
It should be mentioned that within the project, in 2011 Czech company OHL ŽS signed a EUR 2 billion contract with Yamal Railway Company for the construction of Obskaya – Salechard – Nadym section. Yamal Railway company was set as a joint-venture between RZD, Development Corporation and Gazprom. Also, at the beginning of 2016, Russian company VIS TransStroy won the contract for the extension of the railway by building Bovanenkovo – Sabetta section.
Under the concession agreement, the concessionaire will build the railway section as part of the bridges across Ob and Nadym rivers, for Salekhard — Nadym section. The concessionaire will implement the project through identified financial resources, using either own funds or loans.
The construction of Bovanenkovo-Sabetta section will be initiated this year for connection to the port. The construction of the section is implemented through PPP. The contract with VIS TransStroy was signed. This is the final section of Northern Latitudinal Railway which will be 170-km long and will have a capacity of 7 million tonnes. The capacity is expected to increase to 14 million tonnes in the first 10 years of operation.
Russian Minister of Transport Maxim Sokolov announced in January that the financial model of the project was drafted and submitted to the government. “One of the main projects in terms of prospects of development of the Arctic zone of the country is the Northern latitudinal railway. We have submitted to the Government the drafted financial model and I hope that the project will be soon launched,” Sokolov said.
The project cost is estimated at USD 2.6 billion and the bridge subproject is estimated at USD 957 million. According to the authorities’ estimates, the railway is to be commissioned in 2022, providing the transport of 24 million tonnes of freight, mainly condensed gas and oil products.
“The Northern Latitudinal Railway is a very complicated project from the point of view of its performance: there are a lot of participants. The documentation of the project was approved and we are ready to start the construction works,” Dmitry Kobylkin, Governor of Yamal-Nenets said.

by Pamela Luica

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