Without the facility, large 100,000-tonne tankers unable to enter the region's shallow water ports have usually anchored near Murmansk for days while dozens of small vessels come from different ports to fill it with crude.

Opening the facility on a clear but bitterly cold spring morning, operator Rosneft said the giant green tanker may eventually handle 10 percent of Russia's crude oil exports.

"Its total re-export capacity is 11 million tonnes a year (220,000 barrels per day)," Rosneft President Sergei Bogdanchikov told Reuters. "We will gradually boost it to 15 million tonnes."

Regional authorities in Murmansk have lobbied Rosneft to build a large terminal in the town's port, but Bogdanchikov said the floating facility, sited near Russia's main northern nuclear submarine base, was a much cheaper alternative.

"As oilfields in Russia's north are relatively similar and are far from one another, we have to work on efficiency... by using new technologies and simplifying logistics," he said.

"Any terminal with a similar capacity would cost us $120-140 million. This project did not go above $15 million."

PRESSURE VALVE

Rosneft has fully refitted the tanker, leased for 20 years, and plans to ship 2.5 million tonnes via the facility this year, rising to five million tonnes next year.

A number of firms will use the new route, but shipments will be dominated by oil giant LUKOIL (LKOH.RTS: Quote, Profile, Research) . Rosneft plans to add its own volumes in the future, including output from the Polar Lights joint venture with U.S. oil major ConocoPhillips (COP.N: Quote, Profile, Research) .

The facility could gain a second tanker, Bogdanchikov said, if Rosneft decides to use the northern export route to ship crude from the Vankor field after development from 2007.

The Belokamenka facility is one of a raft of new outlet projects prompted by Russia's chronic shortage of oil export capacity and mainly centred on the Baltic Sea.

Russia's crude output has soared 50 percent since 1999 to nine million bpd but domestic consumption has remained flat.

Traders estimate that exports of oil and refined products have more than doubled to around six million bpd, but a further boost is complicated by the lack of spare pipeline capacity and shipping constraints via the crowded Turkish Black Sea straits.

In contrast to Black Sea and Baltic ports - where shipping must pass through narrow straits to reach terminals - Murmansk offers direct access to the Atlantic through the Barents Sea.

And warm currents from the Gulf Stream mean that, unlike the Baltic, the Barents Sea does not freeze in winter despite lying beyond the Arctic Circle.

"It is important that it's a terminal in the open ocean," Bogdanchikov said. "Russia has only one seaborne terminal, in the Pacific, while it faces huge problems in the Bosphorus and will probably have the same problems in the Baltic.

Russia has been trying to divert huge volumes from the Black Sea to the Baltic and its export outlet at Primorsk, but that route too is flanked by straits limiting shipping volumes and experts say it may become just as congested as the Black Sea.