Russia Plans World's Longest Tunnel, a Link to Alaska

by innes | April 18, 2007 at 10:09 pm

5422 views | 4 Recommendations | 2 comments

By Yuriy Humber and Bradley Cook

April 18 (Bloomberg) -- Russia plans to build the world's
longest tunnel, a transport and pipeline link under the Bering
Strait to Alaska, as part of a $65 billion project to supply the
U.S. with oil, natural gas and electricity from Siberia.

The project, which Russia is coordinating with the U.S. and
Canada, would take 10 to 15 years to complete, Viktor Razbegin,
deputy head of industrial research at the Russian Economy
Ministry, told reporters in Moscow today. State organizations
and private companies in partnership would build and control the
route, known as TKM-World Link, he said.

A 6,000-kilometer (3,700-mile) transport corridor from
Siberia into the U.S. will feed into the tunnel, which at 64
miles will be more than twice as long as the underwater section
of the Channel Tunnel between the U.K. and France, according to
the plan. The tunnel would run in three sections to link the two
islands in the Bering Strait between Russia and the U.S.

``This will be a business project, not a political one,''
Maxim Bystrov, deputy head of Russia's agency for special
economic zones, said at the media briefing. Russian officials
will formally present the plan to the U.S. and Canadian
governments next week, Razbegin said.

The Bering Strait tunnel will cost $10 billion to $12
billion, and the rest of the investment will be spent on the
entire transport corridor, the plan estimates.

``The project is a monster,'' Yevgeny Nadorshin, chief
economist with Trust Investment Bank in Moscow, said in an
interview. ``The Chinese are crying out for our commodities and
willing to finance the transport links, and we're sending oil to
Alaska.''

In Alaska, a supporter of the project is former Governor
Walter Joseph Hickel, who plans to co-chair a conference on the
subject in Moscow next week.

``Governor Hickel has long supported this concept, and he
talks about it and writes about it,'' said Malcolm Roberts, a
senior fellow at the Anchorage-based Institute of the North, a
research policy group focused on Arctic issues. Hickel governed
Alaska from 1966 to 1969 as a Republican and then from 1990 to
1994 as a member of the Independence Party.

Alaska's current officials, however, are preoccupied with
other issues, including a plan to develop a pipeline to
transport natural gas from the North Slope to the lower 48 U.S.
states, Roberts said.

The U.S. government's Federal Railroad Administration isn't
directly involved in talks about the link, agency spokesman
Warren Flatau said today.

Finance Agencies

Tsar Nicholas II, Russia's last emperor, was the first
Russian leader to approve a plan for a tunnel under the Bering
Strait, in 1905, 38 years after his grandfather sold Alaska to
America for $7.2 million. World War I ended the project.

The planned undersea tunnel would contain a high-speed
railway, highway and pipelines, as well as power and fiber-optic
cables, according to TKM-World Link. Investors in the so-called
public-private partnership include OAO Russian Railways,
national utility OAO Unified Energy System and pipeline operator
OAO Transneft, according to a press release which was handed out
at the media briefing and bore the companies' logos.

Russia and the U.S. may each eventually take 25 percent
stakes, with private investors and international finance
agencies as other shareholders, Razbegin said. ``The governments
will act as guarantors for private money,'' he said.

The World Link will save North America and Far East Russia
$20 billion a year on electricity costs, said Vasily Zubakin,
deputy chief executive officer of OAO Hydro OGK, Unified
Energy's hydropower unit and a potential investor.

Transport Electricity

``It's cheaper to transport electricity east, and with our
unique tidal resources, the potential is real,'' Zubakin said.
Hydro OGK plans by 2020 to build the Tugurskaya and
Pendzhinskaya tidal plants, each with capacity of as much as 10
gigawatts, in the Okhotsk Sea, close to Sakhalin Island.

The project envisions building high-voltage power lines
with a capacity of up to 15 gigawatts to supply the new rail
links and also export to North America.

Russian Railways is working on the rail route from Pravaya
Lena, south of Yakutsk in the Sakha republic, to Uelen on the
Bering Strait, a 3,500 kilometer stretch. The link could carry
commodities from eastern Siberia and Sakha to North American
export markets, said Artur Alexeyev, Sakha's vice president.

The two regions hold most of Russia's metal and mineral
reserves ``and yet only 1.5 percent of it is developed due to
lack of infrastructure and tough conditions,'' Alexeyev said.

Cluster Projects

Rail links in Russia and the U.S., where an almost 2,000-
kilometer stretch from Angora to Fort Nelson in Canada would
continue the route, would cost up to $15 billion, Razbegin said.
With cargo traffic of as much as 100 million tons annually
expected on the World Link, the investments in the rail section
could be repaid in 20 years, he said.

``The transit link is that string on which all our
industrial cluster projects could hang,'' Zubakin said.

Japan, China and Korea have expressed interest in the
project, with Japanese companies offering to burrow the tunnel
under the Bering Strait for $60 million a kilometer, half the
price set down in the project, Razbegin said.

``This will certainly help to develop Siberia and the Far
East, but better port infrastructure would do that too and not
cost $65 billion,'' Trust's Nadorshin said. ``For all we know,
the U.S. doesn't want to make Alaska a transport hub.''

The figures for the project come from a preliminary
feasibility study. A full study could be funded from Russia's
investment fund, set aside for large infrastructure projects,
Bystrov said.

To contact the reporters on this story:
Yuriy Humber in Moscow at
yhumber@bloomberg.net ;
Bradley Cook in Moscow at
bcook7@bloomberg.net .

Last Updated: April 18, 2007 16:38 EDT