Tuesday, April 1, 2008

Trans-Arctic pipeline to revolutionise whisky



Update: This was, of course, an April Fool!

I have just ripped this straight from Reuters without any changes because I found it so exciting. If it happens, it is going to totally change the whisky market. The US, Canada and Europe will be flooded with Japanese single malt.

A three trillion dollar trans-Arctic pipeline linking Japan with the North American and European oil markets is set to transform the premium spirits market.

The oil pipeline, nearly 12,000 miles in total length and easily the most expensive link of its kind in the world, has been on the drawing board for more than a decade but a last-minute alteration to the blueprints has added a second link along the same route to bring Japanese products to Western markets.

Japan`s Minister of Economy, Trade and Industry Akira Amari denied that spiraling costs had forced the Government to take the innovative step. A parliamentary report issued last week slated ministers for failing to keep the bills down and a junior treasury minister resigned in early 2006 after unconfirmed allegations of graft.

"This is about promoting Japanese business," Amari said. "We are envisaging luxury goods. There is obviously only a narrow spectrum of things that are going to survive the trip but it is little appreciated that, for instance, high value whiskies are far more expensive per litre than oil is.

"Obviously, the quantity we will be able to send is not going to match the oil flow from the US and European markets to Japan, but it is a fantastic opportunity," he said.

Construction of the Japanese legs of the pipeline started in November and contractors are already millions of dollars over budget. The most ambitious parts of the link will require laying pipe under thousands of miles Arctic ocean using temporary rigs moored on shifting pack ice.

Prime Minister Yasuo Fukuda announced last month that the completion date had been put back two years to 2017. But he said he remained committed to the pipeline, which is part of a long term strategy to cut Japan`s dependence on vulnerable southern shipping lanes. The country`s huge industrial sector relies entirely on imported oil.

A much cheaper link to Russian far Eastern oil fields was rejected in 2003 because the European and North American markets offer oil from numerous sources and therefore greater long term reliability.

Amari said: "The real cost of laying the line is up front: you set up the rig, you get everything in the right place, you get the right permissions. Once you have done all that, the cost of laying one or two lines is really immaterial. We have asked the engineers and they are projecting we will do it within the revised budget."

The Government has been in talks with the Suntory and Asahi companies about using the pipeline to send their premium products to the West. Japanese single malt whisky has been enjoying an international vogue in recent years after winning top world competitions.
As I say, I haven't fully processed this yet but it is really momentous. I went on to a company site which posted something immediately after the announcement. They had a diagram up of the planned route and explained how they felt it might work. I am not sure whether they are linked to the project.



I mocked up the cross section below from J.P Kenny's commentary (you have to click on the "specialist expertise" tab, I can't seem to link directly). I don't think there is anything like this in the world:



The black dots are containers of whisky or other spirits. J.P Kenny indicate in their commentary that the containers would have to be plastic and then be transferred to glass when they reached the market. There was no indication of the size of the containers but the basic idea seems to be to float them in a flow of pumped water. In the commentary the company also say that there would likely be some damage and leakage to some of the bottles. Hey! With the ice from the arctic crossing, doesn't that mean free mizuwaris straight from Japan?

Thanks to J.P Kenny and Reuters. Unusually for me, I did not seek permission before posting these lifts from their sites. In this special case I just wanted to get the news out asap. Have sent emails to both and am awaiting a response.
The photo at the top is by Steve Deger and is actually of an Alaskan pipeline. I couldn't find any pics of the Japanese one.

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