VKG reignites diesel production plan ({{commentsTotal}})

Oil shale
Oil shale Source: (Pärnu Postimees/Scanpix)

Viru Keemia Grupp (VKG), the second largest oil shale processor behind Eesti Energia, said its shale oil plant is working better than expected, and the plan to begin producing vehicle fuel could be back on the agenda.

Jaanus Purga, a board member at VKG, said the Petroter 2 shale oil plant achieved maximum power in three weeks and produces more oil than initially planned, the idea to refine the oil into diesel fuel for cars could be back on the agenda.

The company shelved plans last year, which would have led to diesel production as early as 2017, as the state changed environmental tax, which made banks think twice, and due to uncertainty surrounding EU's climate policy.

Purga said VKG will not have to start from scratch and if the company decides to go ahead with the project, a decision which will be made next year, negotiations and constructions should take three-and-a-half years.

Eesti Energia has also played with idea of producing diesel fuel from oil shale, but outgoing CEO Sandor Liive said the initial costs would be great and oil shale could be sent to Finnish refineries instead.

VKG opened the 65-million euro Petroter 2 plant at the beginning of October.