Development activity

Goals and challenges for the upcoming period:

  • Impact assessment of the changes in MARPOL marine fuel quality requirements, adaptation strategy
  • Provision of availability of raw material
  • Separation of the maximum amount of energy from oil shale
  • Adding maximum value to end products
  • Competitive cost price of shale oil
  • New marketing channels to the oil shale products
  • The effectiveness of business processes
THE PROJECT OF CLEANSING CIRCULATION OIL

In 2017, the shale oil plant Petroter III was operating for 331 days, and its produce made 149,300 tons of commercial shale oil. We are dealing here with the phenomenally high reliability and efficiency of using the equipment, which has been achieved in the result of brave decisions made for the sake of the ongoing improvement of the Petroter technology. In 2017, Viru Keemia Grupp started the implementation of the circulation oil purification project, which will allow increasing the oil shale processing capacity of Petroter plants even more, as well as obtaining more commercial oil from oil shale. In the result of the implementation of this project, VKG is going to put to use the new values for the designed processing capacity of Petroter plants as well as the designed commercial shale oil produce, since otherwise, we would have to use in activity reports within the company the efficiency indicators of using the equipment reaching over 100%. Both the manufacturing cost of commercial oil and the added value created in the course of processing oil shale are going to increase.

POWERFUL STEAM-GENERATING UNIT

From the end of 2017, the steam-generating unit with the nominal capacity of 100MW is operating at VKG Energia (on gas fuel). As compared to boilers that use solid fuel, the new steam-generating unit has higher operating efficiency, i.e. while the old boilers had 86%, the new one has 91%. The project of building the boiler was initiated in 2014, but in the following year we were forced to suspend the project due to the crisis. The project was reopened in 2016. The cost of the project has been 9.8 mln EUR.

ASSESSING THE EFFECT OF CHANGES IN THE MARPOL MARGINAL RATE OF SULPHUR CONTENT IN MARITIME FUELS

On 1 January 2020, the new marginal rate of sulphur content in maritime fuels, which will make 0.5%, will come into effect at the global sea, which is going to bring critical changes at the market of maritime fuels. First and foremost, changes in the marginal rate of sulphur content mean that heavy crude petroleum oil that is used for manufacturing maritime fuels with the current marginal rate of 3.5% will find new application as a raw material for refineries or as a fuel for power stations. The effect of these changes already manifests itself in the prices of the futures, i.e. there will be a significant decrease in the prices for heavy crude petroleum oil with the sulphur content of 3.5% within transactions with futures up until 1 January 2020. Even though we proceed from the predominant predictions for the prices for crude petroleum oil with the sulphur content of 1% and the prices for transactions with futures as our basic scenario, according to which we could even expect some improvement in the pricing of crude petroleum oil with the sulphur content of 1% (LSFO), this major change arising from the MARPOL regulation, which is going to come into effect on 1 January 2020, is going to provide us both with numerous opportunities in terms of marketing strategy as well as risks.

THE ONGOING DEVELOPMENT OF THE TECHNOLOGIES WE ARE USING 

Last year VKG invested over 10 million EUR into the upgrading of technologies and improving production processes. In the middle of the year, large-scale works were done for the purpose of upgrading VKG OIl Petroter oil plants. Those projects, together with the new steam-generating unit used at VKG Energia, will enable us to increase the production efficiency of the whole Group and, by doing so, obtain the maximum amount of product from a single oil shale unit.