Russian state nuclear energy agency Rosatom is hatching a $7bn scheme to enter commercial shipping and rival Maersk in the boxship arena.
Plans seen by the Vedomosti daily reveal an ambition for the company to become one of the world's biggest 15 shipping companies overall, carrying 72m tonnes of cargo per year, including 43m tonnes of container cargo.
Rosatom has presented the plans to banks and the information was confirmed by two bankers and a person close to a Rosatom entity, the report said.
Its business plan focuses on the controversial Northern Sea Route (NSR) through the Arctic, which lines like CMA CGM and MSC have ruled out using on environmental grounds.
The agency wants to ship cargo from Asia to Europe, taking business from the southern route through the Pacific and Indian Oceans, the Suez Canal, the Mediterranean Sea and the Strait of Gibraltar.
Maersk partnership?
Rosatom estimated it could reduce shipping times by up to 32%.
The company, whose subsidiary Atomflot operates nuclear icebreakers, has been selected by the Russian government to operate the NSR.
It was reported earlier this year that Maersk was in talks with Atomflot over a new Arctic shipping service.
But Maersk had no plans to operate its own vessels in the Arctic.
Savings in monetary terms "will be partly eaten up due to expensive icebreaker services," and ice conditions could make shipping times unpredictable, Infoline-Analitika CEO Mikhail Burmistrov told the newspaper.
Rosatom wants to start shipments in 2020, raising revenue to $700m by 2023, to $4bn by 2025 and to a peak of $5.6bn in 2026, according to the presentation.
Big fleet plans
President Vladimir Putin wants to quadruple shipping along the NSR to 80m tonnes by 2024. Much of this will be Russian LNG.
Rosatom wants to add transit cargo to Russian cargo, and tanker cargo will only make up 11% of transit shipments, the presentation added.
Of a total budget of $6.97bn, the agency will spend $5.76bn on cargoship newbuildings, with the rest going on modernising port infrastructure and repairing vessels and floating docks.
Rosatom will finance 21% of the project from its own funds, while 50% will come from bank loans and 29% from reinvestment of the project's cash flow.
Russian lender VTB said it was "considering the possibility of financing the construction of nuclear icebreakers and other Arctic projects of the state corporation."
Rosatom is not commenting.
More than 55 ice-class containerships would be needed to ship the targeted amount of cargo. Newbuildings will not be ready to start the service, so the company would have to look at fleet deals or chartering agreements.
Rosatom has previously said the NSR needs $11.7bn of investment.
