November 4, 2008

Eesti Energia, Outotec to Form Oil Shale Processing JV

Estonian energy company Eesti Energia and Finnish minerals processing company Outotec have signed an agreement to form a joint company for the development and marketing of environmentally sustainable and economically viable oil shale processing methods. Eesti Energia is a major user of oil shale.

Eesti Energia will have a majority 60% stake in the new company, while Outotec will hold the remaining 40% stake.

The new company aims to become a significant supplier of oil shale technology solutions, combining Eesti Energia's experience in oil shale mining and processing and Outotec's expertise in circulating fluid bed (CFB) technologies. This agreement supports Outotec's growth strategy as well as Eesti Energia's liquid fuels production strategy.

The joint company aims to improve Eesti Energia's operational shale oil technology, to exploit the improved technology in commercial production plants in Narva, Estonia, and to commercialize the technology for use on oil shale deposits worldwide. The decision for the construction of the first oil plant based on improved technology is aimed to be made in May 2009.

Sandor Liive, CEO of Eesti Energia, said: "Eesti Energia has accumulated unparalleled experience in the fields of oil shale mining, processing and oil shale based power generation. This joint venture will help us start a new era in upgrading the production process to meet future environmental challenges."

Several test programs involving the circulating fluid bed tests have been successfully carried out at Outotec's Research Center in Frankfurt, Germany, during the summer of 2008. Besides oil shales and oil sands, the new technology can also be used in the recycling of hydrocarbon containing materials such as wastes plastics and old tires.