Construction, Energy, Energy Market, Estonia, Good for Business, Investments, Oil

International Internet Magazine. Baltic States news & analytics Thursday, 29.02.2024, 03:31

Estonian govt greenlights Eesti Energia's new oil plant plan

BC, Tallinn , 27.03.2020.Print version
The Estonian government has authorized Minister of Finance Martin Helme to increase the equity capital of state-owned energy company Eesti Energia by means of a cash contribution of 125 million euros to enable the establishment of a new Enefit 280 oil plant by Eesti Energia, reported LETA/BNS.

The establishment of the new oil plant arises from the expectation of the state as the owner, and the strategic objective of Eesti Energia to increase the production of liquid fuel, the government's communication office said.

"The establishment of the new oil plant is a long-term and strategic investment through which we wish to add value to Estonia's most important earth deposit, create new jobs and preserve the natural environment more than has been the case to date," Prime Minister Juri Ratas said.

He said the creation of additional jobs will reduce social risks arising from the ongoing transformation of the energy sector and support the East-Viru region as a whole.

In the construction of the oil plant, some 1,000 people from construction and technology companies will find employment, including up to 700 locals employed in construction. Added to this will be indirect jobs in the service sector during the construction.

According to experts, up to half of the new plant's construction cost may remain in Estonia.

After launch, the plant will create approximately 500 direct and indirect jobs in total. 

Finance Minister Martin Helme stressed that the state as the owner continuously wishes for  Eesti Energia to develop more efficient and cleaner use of oil shale, and oil production is a good example of that. He said the establishment of the plant was consistent with national strategy documents such as the energy sector development plan, oil shale development plan and bases of climate policy.

"Said development plans envisage reducing the direct burning of oil shale and increasing shale oil production," Helme said.

"In the current economic situation it's important to make large infrastructure investments, all the more so as there are grounds to believe that construction rather will become cheaper in the near future," he said.

According to Helme, the carbon dioxide emissions and consumption of oil shale by the Estonian oil shale industry will not increase, but will decrease as a result of the establishment of the new  plant.   

"That is because in parallel to the construction of the new oil plant, Eesti Energia will conclusively shut down several older generating units used for the production of electricity. In addition, in producing electricity from oil shale intensity is several times higher than in the production of oil," Helme said.

The minister also observed that the oil shale sector is a very important source of revenue for the state, which in recent years has contributed over 100 mln euros to the state coffers per year, and it also helps preserve high paid jobs in East-Viru County.

The necessary funds have been provided for in the 2020 state budget.


Search site