Growing coal demand in Asia

With growing demand and competition for liquefied natural gas (LNG), some countries, including Pakistan, are reversing policies for greater LNG imports and are switching back to coal-fired electricity generation.

Pakistan aims to quadruple its coal-fired electricity generation and has put a halt on constructing new gas-fired power plants stating that with the recent boom of LNG in Europe and elsewhere gas had become “unaffordable” for the country. Russian officials thus see a continued strong demand for coal in Asia. 

The NSR has previously been used to ship coal to North America and Asia. In 2013 around 75,000 tons of coal went from the Finnish Baltic port of Pori to Vancouver in Canada on board the bulk carrier Nordic Odyssey.

And in 2021 the bulker Roland Oldendorff traveled from the Russian port of Ust-Luga in the Baltic Sea to South Korea with 100,000 tons of coal produced by the Sibanthracite Group, one of the world’s largest coal producers.

Another Arctic project by the Severnaya Zvezda company, which envisions sending millions of tons of coal from the Taimyr peninsula to markets in Asia such as China and India, was affected by western sanctions in 2022. However, for 2023 the company aims to start shipments of high quality anthracite coal, used in the steel-making process, to China. 

Russian officials, including President Putin, had previously discussed plans with counterparts in Kazakhstan to use the Ob’-Irtysh river system via the Arctic port of Sabetta. The project, which would give the landlocked central-Asian country access to the world’s oceans, was first devised in 2019 but no shipments have occurred yet.