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The Russian ship slipped into Canada's northern seaport under the cover of darkness yesterday, and its arrival was hailed as an historic step in the construction of an Arctic bridge between the two countries.

The Kapitan Sviridov docked in Churchill, Man., yesterday morning, having sailed from Estonia loaded with bags of fertilizer destined for sale to North American farmers. It's the first time the port has accepted imports from Russia.

Officials from the Russian embassy greeted the ship yesterday, along with representatives of the port of Churchill, the Murmansk Shipping Company and the government of Manitoba.

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"Today represents the first successful shipment on the Arctic bridge," said Mike Ogborn, managing director of OmniTrax, the company that owns the port. "It is a great step forward in showing the world that the port of Churchill is a two-way port."

The concept of the Arctic bridge has long been a priority for the government of Manitoba, which sees vast potential for Churchill as the northern hub of a mid-continent trade corridor that would extend to the Gulf of Mexico. Churchill already boasts the advantage of having the shortest sea route between Canada and northern Europe, and it received a substantial boost this month when Prime Minister Stephen Harper announced $68-million in public and private funding to upgrade the aging port and railway.

The Russian government is also eager to encourage Churchill's growth, because it sees it as a natural outlet for its northern port of Murmansk.

"The goal is very simple," said Sergey Khuduiakov, acting press attaché for the embassy of the Russian Federation. "Global warming gives us an opportunity to establish better marine shipping routes between Canada and Russia, and this project, Arctic bridge, has very good prospects.

"For Canada and Russia, we are both very interested in the development of our northern regions. Co-operation is very important for us."

Michael Berk, a research fellow at the Canadian Institute of International Affairs, a non-profit think tank, said Churchill could become the terminus of a new silk road linking Eurasia and North America.

"As ice continues to melt, this is potentially the shortest route connecting North America to Eurasia," Mr. Berk said. "If we expand and connect Churchill with Murmansk, an ice-free, year-round port, we're talking about creating a bridge that will link North American markets with increasingly important Eurasian markets. It's also the closest route for transporting goods from Asia to the Midwestern United States directly, bypassing the bottlenecks of congested ports in the Pacific. When one starts to think about these issues combined, the opportunity is tremendous."

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Mr. Berk said the most eye-catching trade opportunity in Eurasia is oil and gas, but there are many other possibilities, including minerals, raw materials and finished goods.

Mr. Ogborn said he will be travelling to Murmansk later this year to meet with companies interested in shipping through Churchill.

He said he's had a lot of interest from potential buyers and sellers on both sides of the Arctic. Next year, there's likely to be more shipments of fertilizer, as well as other bulk dry commodities, he said. Oil and gas shipments are something his company will look at in future.

"We can accept refined products, so if they ship diesel we have a tank farm that has 40 million litres of capability there," he said.

The fertilizer that arrived yesterday was bought by the Farmers of North America, a Saskatchewan-based co-operative. The ethanol boom has driven fertilizer prices sky high, so the potential exists for much cheaper fertilizer to be brought from Eastern Europe at lower cost.

At the moment, Churchill is open to ships from July to November because of the presence of Arctic ice in shipping lanes. But many say the shipping season could be extended if the major insurance companies would recognize that ice conditions have changed substantially over the past century. Without insurance, ships are unwilling to risk the ice on Hudson Bay, but as the climate continues to change, the shipping season will continue to grow.

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When it leaves Churchill, the Kapitan Sviridov will carry a load of Canadian wheat destined for Italy.

This year, the Canadian Wheat Board will send more than 600,000 tonnes of grain through Churchill, making it by far the port's biggest customer.

The port and its related industries employ about one-third of the work force in this town of 1,000.

Many hope that the Arctic bridge will help return Churchill to its Cold War glory days, when the town had 10 times its current population, many of them employed by the U.S. or Canadian military to keep an eye on the Soviet enemy across the Arctic.

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A DIFFICULT BIRTH

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Churchill has always been a strategic port for Canada, with the first fur traders from Western Europe coming to North America via Hudson's Bay.

But that geographical advantage hasn't helped the port much in recent times, despite its owners' efforts to expand business over the past several decades.

"It's had a very difficult birth," said Barry Prentice, a transportation analyst at the University of Manitoba.

Things had started to look up in the early 20th century, he said, when farmers in Western Canada wanted to utilize the port because it provided the shortest route to the ocean. The problem then was that no rail lines had been built to Churchill.

Three projected railways eventually materialized as a single route in the early 1930s at the farmers' insistence. But intermittent permafrost and uneven ground meant that the tracks were expensive to maintain.

"CN Rail did what they had to do, but they didn't go out of their way to make it really work," Professor Prentice said.

It wasn't until the Second World War that the port saw its true value, with Canada shipping thousands of tonnes of goods to Russia. However, once the war was over, the government-run port had to go back to competing with private grain ports in Thunder Bay and Vancouver.

"The long and the short of it is the grain companies had no interest in moving grain through Churchill because they weren't making any money that way," he said.

The port was sold to Denver-based OmniTRAX Inc. in 1997.

Other factors that have hindered the port's expansion over the years include the fact that Russia, when it was still under Communist rule, didn't do much trading. The port has primarily been used for exporting, but ships coming in empty still have to pay the round-trip rates. And it is plagued by the same problems as other seasonal ports, "if not more so with its season being much shorter," Prof. Prentice said.

But, he added, the port's fate may soon change, especially with the Arctic summers becoming longer - less ice means more traffic. "If there's one positive thing that comes out of climate change, it could be this."

Unnati Gandhi

*****

Port primer

The port of Churchill provides Manitoba with a unique distinction among the Prairie provinces - direct access to the sea.

The location of the port is ideal for shipping products to and from Europe, Russia, Africa, Latin America and the Middle East,

offering a much shorter route to European markets than by the Great Lakes and St. Lawrence River ports.

Churchill can be reached by rail, air and sea.

The rail line was built primarily to link Western wheat lands to the port, but it has also proved to be an invaluable transportation artery for northern Manitoba and the central Arctic region.

DETAILS:

The only deep-water ocean port in the prairie region.

Shipping season: July to November. The use of icebreakers could significantly lengthen the shipping season.

Four deep-sea berths for the loading and unloading of grain, general cargo and tanker vessels.

Able to accommodate Panamax class vessels (up to 60,000 tonne capacity).

Rail access by Hudson Bay Rail and CN Rail to most North American points.

Throughput capacity: more than 1 million tonnes of grain.

Grain accounts for 90 per cent of the port's current traffic.

Sources: gov.mb.ca; omnitrax.ca; portofchurchill.ca

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