Azerbaijan-managed Vessel Is First to Head to China Via Northern Sea Route

An oil tanker managed by an Azerbaijan-based firm is travelling the Northern Sea Route to China for the first time, taking a route so far dominated by vessels managed by Russian shipping giant Sovcomflot, according to LSEG data and two traders.

The vessel Prisma is managed by a private company Vista Vvave Shipmanagement based in Azerbaijan, one of the traders said, citing the vessel's documents.

Moscow wants to increase traffic via the Northern Sea Route (NSR), which runs from Murmansk near Russia's border with Norway eastwards to the Bering Strait near Alaska, making it competition to the Suez Canal.

Although it is a significantly shorter route from western Russian ports to Asia than the Suez Canal alternative, it is challenging and requires icebreakers to help vessels to pass along the Arctic coast of Russia.

The almost 20-year-old Prisma has an ICE 1C class, which allows it to go via the NSR with ice breaker assistance. The vessel loaded crude oil from Russia's Baltic Primorsk port and is currently in the Kara Sea, according to shipping data.

Prisma is sailing under the flag of the Cook Islands and is owned by Evergreen Embrace Corp. registered in the Seychelles, according to the website of Russia's nuclear company Rosatom, which approves requests for transit via the NSR.

Reuters was not able to contact Vista Vvave Shipmanagement or Evergreen Embrace Corp.

This year, six oil tankers carrying some 600,000 metric tons of Russian crude oil have chosen NSR for their voyages to Chinese ports. The NSR is normally open for navigation between July and October, when the Arctic ice becomes thinner.

The first vessel, Olympiysky Prospect, is close to its destination of China's Tianjin. Another five - NS Arctic, SCF Baltica, Moskovsky Prospect, Zaliv Amerika and Galaxy are on their way to various Chinese ports. All six vessels are managed by Sovcomflot Group of companies.

Sovcomflot didn't respond to a Reuters request for comment.

While traders expect higher crude oil shipments via NSR this year, the cost of navigating the route remains high and is more expensive than the route via Suez, traders said. China is the only economically efficient destination for the route, they say.

"I'd rather spend more time en route and pay less than use the NSR, for which you have to receive specific approvals and pay for an ice-breaker service", a source in the Russian oil market said.

Rosatom issues permits for navigation and icebreaker assistance in NSR waters and provides nuclear icebreaker fleet services based on requests from cargo carriers.

(Reuters - Reporting by Reuters reporters and Gleb Stolayrov; Editing by Ros Russell)