Logistic Challenges in the Barents region

The Barents Co-operation will soon mark its 20th years anniversary.


The Barents Co-operation will soon mark its 20th years anniversary. Much has been achieved in a number of areas both culturally and economically as well within people-to-people cooperation. Barents cooperation was established during an economically very difficult time for the new Russia. Now in 2012, the Barents region has evolved to become one of Europe’s most important regions of resources.

The answer for the Arctic areas and the Barents Region is economic development. This development must be sustainable and based on the people working in the region. However, a prerequisite for the economic development is our ability to meet the new logistic challenges. Major transport solutions must be implemented to generate better potential of the region. The region has large logistical challenges, and it can only be addressed through increased cooperation in the Barents Region.

Border passages/border traffic
The development of cross-border traffic in Barents region has, since the establishment of the Barents cooperation, been positive. The starting point was more or less a closed border with the former Soviet Union. Today, Norway has one crossing point and Finland has nine crossing points. During 2011 more than 10 million people passed across these border passages. The traffic by trains, boats and airplanes can be added to this number.

The cross-border cooperation has evolved tremendously. Sweden, Finland and Norway are all part of the Schengen Agreement, which has given good results in negotiations with Russia. Russia opens up for visa-free entry with the EU, but a deal has not yet been realized. This agreement needs to be in place to ensure easier border crossings within Barents region.  Finland has under the framework of Schengen managed to achieve flexible arrangements, and Norway will soon introduce the Finnish practice. Russia has given Americans 3-year tourist visa, but has not opened up for the same possibilities in the Barents region.

The prime ministers meeting in Kirkenes 3-4th June 2013 must ensure that the second Kirkenes Declaration contains distinct improvements in the visa situation. A visa-free regime in the Barents region is fully realizable.

Russia has become a member of WTO, which could lead to a more flexible trade within the region.

Roads in the region
The road system in the three Nordic countries of the Barents region must be said to be acceptable. Some challenges still exist, although, they do not hinder economic contact. Roads linking Norway, Sweden and Finland together have a potential considering improvement and reinforcement.

Sweden will use 1.5 billion SEK on a road to Svappavaara for ore transportation, and will also invest in improved quality of the roads throughout the northern Sweden. New openings of mines in the Barents Region requests new road systems. This is also the case in Russia with a new road throughout the Khibnyfjellene near Kirovsk. This has, however, led to protests from environmentalists since the area is a proposed protected area.

New mines will also open in northern Finland which requires road systems, or railway extensions. In Russia and Norway the road system between Murmansk and Kirkenes will be completed in 2015. Between Finland and Russia there are also ongoing improvements of both Lotta and Salla roads.

Over all, the situation of the roads is acceptable, or at least will be acceptable over time. 

Air traffic
Aviation in the Barents Region is characterized by a north-south traffic pattern. There have been attempts to get east-west relations to function but without success to any extent. The longest existing flight within Barents Region with a Russian destination is the route Tromsø-Murmansk-Archangelsk. But this compound has also been under pressure. It is more likely that several north-south relations than east-west routes will be developed. The requirement for profitability will also apply for cross connections in the region. If the region will strengthen the internal flight connections the Barents politicians needs to take new actions.

The railway system in the Barents Region is an area where there still are major challenges. On the Norwegian side we have Nordlandsbanen to Fauske, and Ofotbanen between Narvik and Kiruna. On the Finnish side the track ends in Rovaniemi with side tracks to Kemijärvi and Tornio. The gauge is different on the Swedish and Finnish side which creates technical challenges. On the Swedish side there are rails until Haparanda. Sweden has built a double line up to Umeå and has plans to extend the tracks to Luleå. In addition, there is a railway between Luleå-Kiruna-Narvik.

On the Russian side the October-railway goes to Murmansk, with side tracks to Nikel, Kirovsk and Revda, and to Kovdor and Alakurti. From Karelia there is also a transition to Kostomuksha – Vartius, and a track to St Petersburg goes through Karelia. Further, there is a track to Archangelsk Oblast and the Republic of Komi, where Belkomur could be an important link between Archangelsk and Komi.

The Barents Region has great challenges with the railroad system. It lacks tracks, pairing, different gauges, inadequate electrification and administrative obstacles. There are various initiatives in the four Barents countries. On the Norwegian side there has not been much interest from the central office to do something with the railway system in the north. Regionally, we want a double line on the Ofotbanen. We also want a connection with the Finnish railway system either to northern Troms or to Kirkenes. An extension of the track from Kirkenes to Nikel has long been discussed, without action from national authorities.

What may trigger new railway solutions is comprehensive discovery of minerals, oil and gas. If the gas is connected to the minerals in the region it will also increase the opportunities for new solutions. One of the main challenges is connecting the Baltic Sea with the Barents Sea. Finland acts as the driving force in this development, and it can also trigger a realization on the Norwegian side.

The Barents Region is demarcated on the south by the Baltic Sea and in the north by Norwegian Sea, Barents Sea and Kara Sea. Railway relations between the Sea areas are limited, but the roads are relatively well connected. Both on the Swedish and Finnish side there are good harbors in cities like Luleå, Skellefteå, Kemi and Oulu.

The increased activity in minerals, oil and gas will create a need for new logistic solutions. On the Russian side, we currently have large exports of petroleum products through a number of ports. Murmansk is definitely the biggest port in the region. There are extensive plans for expansion and new rail on the west side of the Murmansk Fjord. Murmansk harbor is now full, but it can be further extended. Archangelsk has a large port, but with clear limitations in terms of depth, ice and price. Port facilities in Severodvinsk have limitations for military reasons, and the railway is in poor condition. There are also major military ports on the Kola linked to the Russian Northern Fleet.

On the Norwegian side, there are a number of ports of different sizes and functions. The port of Narvik is linked to the export of ore from the Swedish company LKAB and the new mines in Pajala. Narvik harbor has development plans related to the Russian and Chinese markets. Furthermore, there are regional ports along the coast – Bodø, Mo I Rana, Harstad and Tromsø. Hammerfest has developed special features related to oil and gas, and exportation of LNG from Melkøya. Kirkenes is an export port for iron ore and a “home port” for Russian trawlers. It has also become an important service port for seismic. In addition, ongoing work is running to establish an oil terminal in Kirkenes with a capacity of transshipment of 20 million tons of oil annually.

Transport of gas and oil in the Barents region
Barents region currently has no piping for transport and use of gas. This may change as a result of new discoveries which may be linked to usage in the processing of metals – where gas meets ore.

Exports of oil and condensate from the Barents were 12 million tons in the year 2011. Now, LNG goes to Asia through the Northeast Passage. An extension of a pipeline via North Sea, the Norwegian Sea to the Barents Sea is being planned. How a future distribution of gas will appear in the Barents region is dependent on price, discovery and size. A future distribution of gas will also depend on future model for pricing LNG and the balance between consumption and production in Asia, as well as the more adjacent parts of the world. As a result of the growing gas production combined with U.S becoming a net exporter of gas, the gas from the Barents Sea might only will be profitable to sell to Europe. Irrespectively, the significance of the Barents Region as an energy province becomes more important.

Power Generation in the Barents Region
The Barents Region is a net producer of electricity, and a great exporter. The challenge of future power generation is to what extent new mineral deposit, and the oil and gas industry, will trigger the need for new power? Major discoveries of gas could trigger new construction of power plants. Russia necessitates a decline in the traditional energy-intensive industries as a consequence of the modernization/energy saving and restructuring of Russian industry.

Another challenge is the lack of line capacity for transfers within the region. Norway has, furthermore, on moral grounds refused to import electricity from the nuclear power plant on Kola Peninsula, while we import power in the south indirectly from the Leningradskaya nuclear power plant with four Chernobyl reactors!

Barents region also has enormous potential for wind power. Finnmark County alone has 70% of Norway’s potential wind power. Again, the inadequate logistics for the energy exchange is the region’s main challenge.

Safety / Rescue / Telecommunication / Navigation
The increased economic and industrial activity in Barents region will require an increased focus on safety and rescue. Through Barents Rescue the countries in Barents have practiced different scenarios. Climate challenges and increased activity on the seas necessitates an even stronger cooperation in surveillance and security. An important tool in this context is the Barentswatch, launched by Norway.

As a result of the increased traffic in the Northeast Passage, the requirements for better navigation and navigation security will increase. Here, the cooperation in the Barents Region will be essential.

The Barents Region has fiber optics throughout the region. A requirement needed is that the optics is linked together giving the region as a whole an increased competitiveness and security.

The economic and industrial development in the Barents Region will create a need for whole new transport flows. As a result of a large-scale investment in minerals the transport demand will increase considerably in the region. The transport infrastructure we have today is not sufficient and requires new policy initiatives. Both roads and rails must be repaired and strengthened, and the capacity must be increased. New roads and railway tracks must be built.

New development projects must be initiated in the transport sector, and new financing methods should be investigated. Barents countries need to look at co-financing of the total logistics in the region.