Impacts of an Ice-Free Northeast Passage on LNG Markets and Geopolitics

FCN Working Paper No. 04/2017

42 Pages Posted: 26 Feb 2018 Last revised: 22 Aug 2018

See all articles by Michael Schach

Michael Schach

RWTH Aachen University

Reinhard Madlener

RWTH Aachen University

Date Written: June 1, 2018


We examine the relevance of an ice-free Northeast Passage as a shipping route, especially for LNG-supplying and -consuming countries. Four aspects are considered in-depth: (1) Developments in natural gas production in the Russian Arctic; (2) Trends and strategies of major Asian LNG-consuming countries; (3) Geopolitical significance of the Northeast Passage; (4) Geographical and climatic particularities of the Arctic. The analysis also comprises an assessment of the competitiveness of Russian LNG exports along the Northeast Passage, a discussion of the impacts on LNG transport routes and markets, and an evaluation of the geopolitical implications of this new shipping route. We find that an ice-free NEP is relevant for maritime bulk and particularly LNG shipping, and thus of great geopolitical importance and strategic interest for countries such as Russia, the US, China, Japan, and South Korea.

Keywords: LNG Markets, Geopolitics, Northeast Passage, Arctic, Russia, Asia

JEL Classification: Q30, Q40

Suggested Citation

Schach, Michael and Madlener, Reinhard, Impacts of an Ice-Free Northeast Passage on LNG Markets and Geopolitics (June 1, 2018). FCN Working Paper No. 04/2017. Available at SSRN: or

Michael Schach

RWTH Aachen University ( email )

Templergraben 55
52056 Aachen, 52056


Reinhard Madlener (Contact Author)

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)


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