Rosatom, Novatek join Arctic Economic Council

The two companies are joining the international Arctic business forum as Russia prepares for a two-year period chairing the Arctic Council.

The logo of Rosatom Corp. is pictured at the World Nuclear Exhibition (WNE), the trade fair event for the global nuclear community in Villepinte near Paris, France, June 26, 2018. (Benoit Tessier / Reuters File Photo)

As Russia prepares to assume the two-year rotating chair of the Arctic Council later this year, two major Russian companies active in the Arctic have joined the Arctic Economic Council.

Rosatom, Russia’s state nuclear energy corporation, and Novatek, a private company that’s the country’s second-largest producer of natural gas, are both joining the AEC, an independent business forum launched by the Arctic Council.

Rosatom supplies about 20 percent of Russia’s electricity and holds assets in nuclear power and machine engineering and construction. In 2018, the Russian government appointed Rosatom to manage the Northern Sea Route.

The Northern Sea Route grants direct access to the Arctic, a region of increasing importance for Russia due to its abundance of fossil fuels. Moreover, due to climate changes, the extraction of natural resources, oil and gas are easier than ever before.

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Since Russia’s handover of Northern Sea Route’s management, Rosatom’s emphasis on the use of nuclear power for shipping, infrastructure development and fossil fuel extraction is likely to become more prevalent in the Arctic region.

The company already operates the world’s first floating nuclear power plant in the Siberian port of Pevek and is the only company in the world operating a fleet of civilian nuclear-powered icebreakers.

The company also has plans to expand the fleet of heavy-duty nuclear icebreakers to a minimum of nine by 2035.

The logo of Russian gas producer Novatek is seen on a board at the St. Petersburg International Economic Forum (SPIEF), Russia, June 6, 2019. (Maxim Shemetov / Reuters File Photo)

Operating the Yamal LNG plant in Sabetta, Novatek is the largest private company operating in along the coast of the Russian Arctic.

In a press release announcing the move to join the AEC, the company’s chairman, Leonid Mikhelson, said that one of the company’s main priorities is “responsible business conduct in compliance with international standards and best practices in environmental protection and climate change mitigation.”

Becoming a member of AEC will enable the company to work in an environment which supports their principles of responsible development, the company said.

Meanwhile, in another step towards greener development the company is weighing a move to hydrogen production.

On Jan. 29, Novatek signed a Memorandum of Understanding with German energy company Uniper to examine the possibilities of developing a hydrogen value chain. The MOU is looking into the production of “blue” hydrogen from natural gas. This will be accompanied by carbon capture technology which will capture and store the CO2 product from the hydrogen production. Additionally, the partners agree to look at possible production of “green” hydrogen from renewable energy sources.