Russian energy giant Rosneft (ROSN.MM) said on Tuesday it has started construction of an Arctic oil terminal at the Bukhta Sever port, part of its huge Vostok Oil project, aimed at facilitating development of the Northern Sea Route.

The port will become Russia’s largest oil terminal with 102 reservoirs to be built by 2030, the company said.

Rosneft is leading the project that is comparable in size to the exploration of West Siberia in the 1970s or the U.S. Bakken oil region over the past decade.

Russia is facing challenges in developing its oil industry due to the sweeping Western sanctions imposed against Moscow after the Kremlin sent troops into Ukraine on Feb. 24.

Global commodities trader Trafigura earlier this month sold its 10% stake in the Vostok Oil project to a Hong Kong-registered trading firm, Nord Axis.

Rosneft has also approached other trading firms about participation in the project and sold a 5% stake to rival trader Vitol and Mercantile & Maritime for $4 billion last year.

Rosneft plans to tranship some 30 million tonnes (600,000 barrels per day) of oil via the Bukhta Sever port per year initially with a gradual increase to 100 million tonnes by 2030.

The company said on Tuesday that it had also started production drilling at the northern Payakha oil field, also part of Vostok Oil.

Reuters by Kirsten Donovan, August 5, 2022