Helsinki yard turns to special vessels for Arctic conditions
Climate change and emerging Russian market bring new orders to Hietalahti shipyard
The Vitus Bering, a hundred-metre-long service vessel with icebreaking capabilities, is moored to the furnishing dock of the Hietalahti shipyard in Helsinki.
When the vessel is delivered in December to its buyer, the Russian maritime shipping company Sovcomflot, it will first sail to St. Petersburg and from there to its area of operation - the Sea of Okhotsk, north of the Kuril Islands, to service offshore gas rigs there and to protect them from ice.
Owing to climate change, the need for vessels like the Vitus Bering, which can handle ice, is growing apace.
As the climate is warming, new and previously unreachable oil & gas reserves are being revealed from under the shrinking ice sheets. The idea is to make use of these reserves.
As the ice sheets withdraw, traffic in the northern sea routes may increase in general, for these routes are considerably shorter and quicker than the present ones available from Western Europe to the Pacific coast of Asia.
For Arctech, the company that owns the Hietalahti yard, the growth in the Arctic maritime traffic translates to a massive business opportunity.
Arctech, which is co-owned fifty-fifty by the South Korean shipbuilder STX and the Russian United Shipbuilding Corporation (USC), commenced its operations in April 2011.
Just like its name implies, Arctech specialises in vessels capable of operating in icy conditions.
Finland has long traditions and a lot of expertise in this field, for 60 per cent of the world’s icebreakers have been built in Helsinki, Arctech CEO Esko Mustamäki explains.
Russia is Arctech’s most important market area. In the background to this is the backbone of the Russian economy, the country’s oil and gas production, for which vessels with Arctic capabilities are needed.
Mustamäki shows predictions for Russia’s need for Arctic vessels by the year 2030. The forecasts are based on a report by the Russian government.
In the next twenty years there will be a market in Russia for three hundred such vessels, in the building of which Arctech has strong knowhow and traditions.
If for example ten per cent of the predicted necessary vessels were to be ordered from Arctech, the firm would have to build about one and a half ships a year for the next 18 years.
And Arctech could easily increase its production volume from this. As an example, Mustamäki mentions the Vitus Bering, the price of which is USD 100 million or just over EUR 80 million.
“We will be capable of constructing four such ships per year, once we have tweaked and tuned the yard a little bit”, Mustamäki says.
The Russian customers’ wish is that Russia’s contribution to the ordered ships would be fairly high, Mustamäki explains.
This is why Arctech purchases design services and ship equipment and parts, such as large hull blocks, directly from Russia.
In the case of Vitus Bering and its sister vessel Aleksei Tširikov, more than 90 per cent of their hull blocks were constructed at a shipyard in Vyborg, Russia.
On the other hand, the vessels’ engines come from the Wärtsilä factory in Vaasa and rudder propellers from the ABB factory in Helsinki’s Vuosaari.
With vessels such as the Vitus Bering, the degree of the Finnish input is in the region of 50-80 per cent, Mustamäki estimates.
Aside from Russia, the other half of the Arctic sea-areas is controlled by the USA and Canada.
Especially in the United States the federal legislation and traditions limit foreign shipbuilders’ entry into the country’s shipbuilding market.
“From our point of view, the American market is an area that we will not focus on that much”, Mustamäki explains.
According to Mustamäki, the Canadian market has similar features to the American, but at least it offers some windows of opportunity for Arctech.
Previously in HS International Edition:
Rauma shipyard delivers Antarctic research vessel to South African government (5.4.2012)
Finnish companies hope to join forces with planned new St. Petersburg shipyard (30.3.2012)
STX Turku shipyard is building a passenger vessel that will use liquefied natural gas as fuel (7.3.2012)