Arctic Connect cable is put on ice
Arctic Connect, the planned trans-Arctic subsea cable connecting Europe and Asia, has been suspended following reports of stalled negotiations with the project’s Japanese partners.
According to reports, the Arctic Connect cable project, which is being developed by Russian telco Megafon and Finnish infrastructure operator, Cinia is now being ‘revised’ with no official word on whether it will still go ahead in the future.
Speaking to Russian news agency, Interfax, sources at MegaFon said: “We have decided to reconsider the structure and economy of project Arctic Connect and we need time for such a reorganisation. Since 2019, we have undertaken huge works, both at sea and on land, and all studies will be applied in the future if we decide to continue.”
As of June 2020, MegaFon had already started with the first stage of its offshore survey, partnering Rosgeologiya and using its Professor Logachev research vessel, a process that lasted 3 months to complete. 2021 was due to be the start of the construction tender process as well as additional survey operations, and according to MegaFon CEO Gevork Vermishyam, the system was due to go live at some point in 2023.
The company has started to inform its partners and providers about its decision, with many speculating that the fall out is due to failed negotiations with the project’s Japanese partner Sojitz Corporation. According to the Russian business newspaper Vedomosti, Sojitz failed to provide co-financing as per the cooperation agreement formed in 2020.
The 18,000km, 200Tbps system was due to connect the Norwegian town of Kirkenes on the Barents Sea coast and Europe with Russia, Japan, China and North America, with a price tag of somewhere close to €1.2 billion.
In his own statement, Ari-Jussi Knaapila, CEO of Cinia, said: “Despite the fact that the development phase of the project has progressed as planned and the funding for this phase has been secured, the key stakeholders have now decided to put the development project on hold. To correct some completely misleading information appeared in the media, this suspension is not due to Cinia Alliance members as we believe that the opportunity still exists with a great international interest.”