October 2019

Preliminary design works of liquid fuel pre-refining plant have started

The agreement was concluded following the session of the Government’s Climate and Energy Committee which was held on 30 September and which supported continuing preliminary work on the project. In October, the Executive Director of the International Energy Agency (IEA), Faith Birol, presented a new analysis in Estonia, stating that demand for liquid fuels will continue growing in the world at least until 2040. The preliminary design of the plant will be completed in the summer of 2020 after which the preparation of the main design project will be decided.
According to Ahti Asmann, the Chairman of the Management Board of Viru Keemia Grupp, the proposed pre-refining plant will benefit all the parties – the Estonian state and society and the producers of liquid fuels.

“The implementation of this development project is particularly topical now when the society is moving towards a cleaner and environmentally friendlier economy,” said Asmann. “The establishment of the pre-refining plant would help take the added value created by the oil shale industry to a new qualitative level, while reducing the burden on the environment. The engagement and interest of the Government in the project gives a positive signal to the investors with regard to legal certainty and increases the probability of the implementation of the project.”

According to Hando Sutter, the Chairman of the Management Board of Eesti Energia, the support of the Government’s Climate and Energy Committee and the long-term prospects of the world’s demand for liquid fuels give the assurance necessary for continuing with the project.

“We believe that pre-refining is a reasonable solution for Estonia. Firstly, the demand for liquid fuels is estimated to remain high at least for another 20 years. Secondly, Estonia has the resource and the competence to develop a competitive technology for exporting fuel the sulphur content of which would be five times lower than the allowed limit. Thirdly, we are able to achieve the long-term carbon reduction goals also with the pre-refining plant,” said Hando Sutter, the Chairman of the Management Board of Eesti Energia, adding that the revenue earned form the project could in turn be invested into new carbon-neutral technologies.

The transmission from the production of electricity from oil shale to the production of liquid fuels would reduce the CO2 emissions of energy production 3.3 times. The pre-refining plant would increase Estonia’s annual export revenue by 225 million euros and add 90 million euros to the state treasury in annual tax revenue.
Eesti Energia AS and Viru Keemia Grupp AS are equal partners in the cooperation agreement concluded for the establishment of the shale oil pre-refining plant. The plant would be capable of re-processing 1.6 million tonnes of liquid fuels a year. The estimated cost of the project is 650 million euros and the estimated time of completion is 2024. The plant would create nearly 100 jobs and ensure the survival of the existing jobs in Ida-Viru County.

KT Kinetics Technology has successfully participated in the construction procurements of several Estonian oil shale industry development projects and has extensive experience in designing and building pre-refining plants.