In late July, the Japanese media reported the adoption of a major final investment decision (worth 2 billion US dollars) by the Sumitomo Mitsui Banking Corporation and the Japan Bank for International Cooperation (JBIC). These financial structures will invest in the advanced Arctic LNG 2 project, controlled by NOVATEK, an independent natural gas producer in Russia.

Such large financial interventions in the Russian fuel and energy sector are a high assessment by Japanese investors of LNG industry's strategic prospects and marginality. Moreover, the threat of stepped-up US sanctions pressure on the Russian fuel and energy sector, as this case shows, is yet unable to obscure economic reasoning for Japanese banking groups' engagement in the Arctic LNG 2 project.

As such, NOVATEK entered the final phase of its negotiations with the consortium of international banks on financing Project Arctic LNG 2. This came in a statement by deputy chairman of the company's management board Mark Gyetvay during a conference call in late July. "We are working on closing this process in the nearest future," Gyetvay explained.

According to NOVATEK, the planned total amount of external funding for the Arctic LNG 2 project is some 9.2 billion euros. Of these, 3.11 billion is a 15-year long credit line of the Russian bank syndicate; a contract with it was signed in April.

Arctic LNG 2 is NOVATEK's second bulk LNG production project (the first one is Yamal LNG). The resource base is the Utrenneye (Salmanovskoye) field in the Yamal-Nenets Autonomous District. The project stipulates building three process trains with a capacity of 6.6 million tons each (an annual 19.8 million tons of LNG). The shareholders comprise NOVATEK (60%), French Total (10%), China's CNOOC (10%), China's CNPC Exploration & Development Company (CNODC) (10%), as well as a consortium of Japanese companies Mitsui & Co and JOGMEC – Japan Arctic LNG (10%).

The Japanese authorities and private sector consider the NOVATEK project a fair opportunity to enhance the country's energy security by increasing the component of Russian LNG in the motley portfolio of suppliers. And NOVATEK aims to increase LNG production in Yamal and Gyda peninsulas over the long haul. Moreover, arranging the gas giant's commodity logistics is roughly associated with the overall development of the Northern Sea Route (NSR). The federal authorities' priority is to ensure the multi-season operation of the artery.

The year-round navigation along the Northern Sea Route is part of Russia's socio-economic development strategy. The strategy list includes several dozen projects that were presented to Russian President Vladimir Putin at the July 19 meeting of the Council for Strategic Development and Priority Projects. The plan to make the Northern Sea Route all-season is one of the strategy's most capital-intensive designs, with about a fifth of all the public funds meant for strategic projects planned to be allocated. As Deputy Prime Minister of the Russian Federation Andrey Belousov said during the presidential meeting, funding of the Northern Sea Transit Corridor under the aegis of NSR will require 716 billion rubles until 2030, of which over 400 billion to be invested in 2021-2024. Rosatom will inject 250-260 billion, another 130-140 billion are going to be allocated from the budget and the National Wealth Fund (NWF). At that, the cost sheet for year-round vessel voyage along the Northern Sea Route will be probably adjusted upwards and may well exceed 1 trillion rubles.

The Russian authorities plan to boost the icebreaker fleet to bring the NSR to an all-season mode, with the Turkish Sefine Shipyard having won a 13.3-billion-ruble contract for the construction of a field-specific icebreaker ships to work en route.

At the same time, experts are on the fly to actively discuss the alleged inevitability of global warming and its key consequence for the NSR – the retreat of Arctic Sea ice. Eventually, it is not quite clear whether the planned quantity of expensive icebreakers will remain relevant in the offing. That is, climate risk prediction is next to impossible here.

Nevertheless, present-day navigation in NSR's eastern sector is impossible in winter without icebreaker assistance. Ice depth may reach 2.5-3 meters there. "Year-round navigation along the Northern Sea Route will turn it into a full-fledged alternative to the Suez Canal, reducing the sea route from Europe to Asia by more than 30%," Minister for the Development of the Russian Far East and Arctic Alexey Chekunkov said addressing the ministerial board in May 2020.