Eesti Energia

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"Enefit" redirects here. For the shale oil extraction technology, see Galoter process.
Eesti Energia
Enefit
Type Public limited company
Industry Energy
Founded 1939 (1939)
Headquarters Tallinn, Estonia
Area served Estonia, Latvia, Lithuania, Finland, Jordan, Utah
Key people Sandor Liive (CEO)
Products Electric power and heat
Oil shale
Shale oil
Services Electricity and heat distribution
Sale of electricity
Revenue €858 million (2011)
Owner(s) Government of Estonia
Employees ~ 7400 (2010)
Website www.energia.ee

Eesti Energia AS is a public limited energy company in Estonia with its headquarters in Tallinn. The worlds biggest oil shale to energy company was founded in 1939. The company operates in Estonia, Latvia, Lithuania, Finland, Jordan and the State of Utah, United States. In Estonia the company operates under the name Eesti Energia, while using the brand name Enefit for international operations. The main raw material for energy production – oil shale – is extracted from mines located in Eastern-Estonia and owned by the company. The group of Eesti Energia has three main products: electricity, shale oil and providing electricity network services (Elektrilevi OÜ). Its shares are owned by the Government of Estonia.

History

Headquarters of Eesti Energia in Kadaka, Tallinn.

Eesti Energia was founded in 1939. In 1998, it was reorganized from the state enterprise to public limited company. In 1998–1999, two distribution companies (Läänemaa Eletrivõrk and Narva Elektrivõrk) were separated from Eesti Energia and privatized.[1]

In 1995, the Government of Estonia started negotiations with NRG Energy, a subsidiary of Northern States Power Company, to create a joint venture on the basis of Narva Power Plants, a subsidiary of Eesti Energia. According to the basic terms of sale, agreed in 2000, NRG Energy was to acquire 49% stake in Narva Power Plants. In addition, that time Narva Power Plants owned also 51% stake in the oil-shale mining company Eesti Põlevkivi.[2][3][4] The proposed deal got a strong public and political opposition.[5][6] The deal was cancelled by the Government on 8 January 2002 after NRG Energy failed the deadline to secure financing for the deal.[7] On 21 August 2002 NRG Energy filed to the London court claiming £100 million compensation for damages from the cancelled deal; however this claim was rejected.[8]

In 1999, Government handed 51% of shares of Eesti Põlevkivi to Narva Elektrijaamad.[9] In 2003, Government transferred remained 49% stake in Eesto Põlevkivi to Eesti Energia. Also Narva Elektrijaamad-owned 51% stake was transferred to Eesti Energia and Eesti Põlevkivi became a fully owned subsidiary of Eesti Energia.[10]

In 2000, Eesti Energia and Latvenergo announced a plan to merge companies to create a new Baltic Power Group.[11] However, this deal was halted due to Latvian legislation forbidding privatization of Latvenergo and uncertainties around the NRG deal.[12][13]

In 2003, Eesti Energia tried to privatize Lithuanian distribution company RST. Although Eesti Energia fulfilled the privatization criteria and was the only bidder at the final stage of privatization, the privatization was halted by the Lithuanian Government.[14][15]

On 1 December 2005, during his visit to Estonia, Lithuanian Prime Minister Algirdas Brazauskas met with the CEO of Eesti Energia Sandor Liive to discuss Eesti Energia's participation in the proposed Visaginas Nuclear Power Plant project.[16] On 8 March 2006, the heads of Lietuvos Energija, Eesti Energia and Latvenergo during their meeting in Ignalina signed a memorandum of understanding on the preparation for construction of a new nuclear reactor in Lithuania.[17] Eesti Energia negotiated for six years; however, the project was put on hold after government change in Lithuania at the end of 2012.[18][19]

In 2006, Eesti Energia started to trade at Nord Pool Spot power exchange by acquiring Finnish trading company Solidus Oy.[20] At the same year it started to sell electricity in Latvia and one year later in Lithuania. The company started its international oil shale activities in 2006. That year its subsidiary Oil Shale Energy of Jordan was created for the shale oil development project in Jordan. The memorandum of understanding between Eesti Energia and Government of Jordan was signed on 5 November 2006.[21] The concession agreement was signed on 11 May 2010 in the presence of Jordanian and Estonian prime ministers Samir Zaid al-Rifai and Andrus Ansip.[22] In March 2011, it acquired 100% shares of the Utah-based Oil Shale Exploration Company.[23][24][25]

To implement the EU 3rd energy package, on 28 August 2009 Government decided to separate and buy-out the transmission system operator Elering from Eesti Energia.[26] The transaction was concluded on 28 January 2010.[27]

In 2010, the government considered the initial public offering of shares at the London Stock Exchange; however, this plan was postponed.[28][29]

Operations

Eesti Energia produces and sells electricity, heat and fuel (oil shale and shale oil) and provides customer and consulting services.

Eesti Energia is the leading energy company in the Baltic states and the largest company in the world working with oil shale – each year about 15 million tonnes of oil shale are used to produce energy.

Oil shale is a sedimentary rock formed on the bottom of lakes and seas 400–450 million years ago. Oil shale can be used directly as a fuel for producing energy or synthetic oil. Oil shale is not well known as a fuel for energy production, because it has been used much less than coal and crude oil. However, the high price and diminishing reserves of crude oil and economic growth have led to interest in the possible wider use of oil shale.

Eesti Energia extracts oil shale by opencast mining in the Narva quarry and by underground mining in Estonia mines.

The largest Estonian producer of electrical and heat energy is Narva power plants, owned by Eesti Energia, which provides around 95% of the electrical energy consumed in Estonia and supplies the whole town of Narva with heat.

The Eesti and Balti power plants, the production plants in Narva, are the world's largest power stations running on oil shale and can each produce about 9 TWh of electricity each year.

For shale oil production, Eesti Energia uses a unique solid heat carrier technology process. The first Enefit technology oil plant was commissioned in 1980 and is still operating. Eesti Energia currently operates two Enefit-140 shale oil units that are the only working plants of their kind in the world. The plants produce about 1,4 million tones of shale oil per year. The new-generation Enefit280 plant is currently in hot-commissioning process (2013) and will double current capacities.

International activities

In Jordan, its subsidiary Jordan Oil Shale Energy Company is preparing construction of a shale oil plant with capacity of 36,000 barrels per day (5,700 m3/d).[30] The shale oil plant will use the Enefit processing technology technology; construction is slated to begin by 2015.[21] Its another subsidiary in Jordan, Attarat Power Company, is planning to build a 460 MW oil-shale-fired power plant at Attarat Umm Ghudran. The power station is expected to be operational by 2016.[31][32][33]

In Utah, United States, its subsidiary Enefit American Oil owns or leases more than 30,000 acres (120 km2) of oil shale property in the Green River Basin. Enefit American Oil plans to build a 57,000 barrels per day (9,100 m3/d) shale oil plant.[34]

Subsidiaries

Eesti Energia has following subsidiaries:

  • AS Eesti Energia Kaevandused (100%) – a oil-shale mining company engaged in the extraction and sale of oil shale. The company supplies Eesti Energia's Narva Power Plants and other customers with fuel (oil shale). Eesti Energia Kaevandused consists of two mines, two quarries and a railway transport unit.
  • OÜ Eesti Energia Jaotusvõrk (100%) – a distribution network operator.
  • AS Eesti Energia Õlitööstus (100%) – an operator of the Narva Oil Plant
  • Televõrgu AS (100%) – a telecommunications network company
  • AS Eesti Energia Tehnoloogiatööstus (100%) – manufacturer of energy and industrial equipment, maintenance and supply services.
  • AS Eesti Energia Võrguehitus (100%) – network construction, planning and consulting on electrical systems.
  • Enefit Outotec Technology (60%) – a joint venture with Outotec for developing shale oil extraction technology[35]
  • Iru Elektrijaam (100%) – Iru Power Plant, heat and power company.
  • AS Nordic Energy Link (39.9%) – operator of Estlink submarine power cable between Estonia and Finland.
  • SIA Enefit (100%, Latvia) – a subsidiary supplying electricity and offering balance provider services in Latvia.
  • UAB Enefit (100%, Lithuania) – a subsidiary supplying electricity in Lithuania.
  • Jordan Oil Shale Energy Company (76%, Jordan)
  • Attarat Power Company, Jordan
  • Enefit American Oil (former name: Oil Shale Exploration Company, 100%, United States)[24][25]

See also

References

  1. ↑ "Promoting Trade in Services Experience of the Baltic States: Experience of the Baltic States". OECD. 2004. p. 99. ISBN 9789264106161. 
  2. ↑ "OECD Reviews of Foreign Direct Investment: Estonia". OECD Reviews of Foreign Direct Investment 8. OECD. 2001. p. 60. ISBN 9789264195219. 
  3. ↑ Kurm, Kairi (2000-07-06). "American NRG gets clear shot at power investments". The Baltic Times. Retrieved 2013-01-19. 
  4. ↑ McGee, Joshua (2000-06-28). "NRG Energy gets go ahead on Estonia purchase". Oil & Gas Journal (Pennwell Corporation). Retrieved 2013-01-19. 
  5. ↑ Kurm, Kairi (2001-08-23). "President criticizes power plant privatization". The Baltic Times. Retrieved 2013-01-19. 
  6. ↑ Kurm, Kairi (2001-07-12). "Anger at power plants deal set to explode". The Baltic Times. Retrieved 2013-01-19. 
  7. ↑ Kurm, Kairi (2002-01-17). "U.S.-Estonian energy deal falls through". The Baltic Times. Retrieved 2013-01-19. 
  8. ↑ Gunter, Aleksei (2002-08-29). "NRG files lawsuit over sell-off". The Baltic Times. Retrieved 2013-01-19. 
  9. ↑ "Estonian government allocates energy shares ahead of privatization". ETA. 1999-06-02. (subscription required). Retrieved 2013-01-19. 
  10. ↑ "Estonia industry: Government to give Eesti Energia stake in Eesti Polevkivi". Economist Intelligence Unit. 2003-01-17. (subscription required). Retrieved 2013-01-19. 
  11. ↑ Donald, Brooke; Medenis, Valters (2000-05-25). "Power companies hint at possible merger". The Baltic Times. Retrieved 2013-01-19. 
  12. ↑ Kudayarova, Diana (2000-07-20). "Latvenergo likes its winters cold". The Baltic Times. Retrieved 2013-01-19. 
  13. ↑ Sindrich, Jaclyn M. (2000-07-13). "Berzins: Estonian-Latvian power merger threatened". The Baltic Times. Retrieved 2013-01-19. 
  14. ↑ "Lithuania shortlists Eesti Energia for privatisation of its power grid". Baltic Business News. 2003-09-24. Retrieved 2013-01-19. 
  15. ↑ "The Lithuanian way". The Economist. 2004-01-15. Retrieved 2013-01-19. 
  16. ↑ Hõbemägi, Toomas (2 December 2005). "Lithuanian PM - Eesti Energia discuss plan to build new nuclear power station". Baltic Business News. Retrieved 2013-01-19. 
  17. ↑ "Three Baltic states say "yes" to nuclear energy". ENS News (European Nuclear Society) (12). April 2006. Retrieved 31 July 2008. 
  18. ↑ Nerijus Adomaitis (2007-07-06). "Baltic, Polish firms to negotiate nuclear plant". Reuters. Retrieved 2010-03-09. 
  19. ↑ Estonians frustrated about Lithuania's indecision regarding Visaginas NPP. BNS. 2012-11-28. Retrieved 2013-01-19. 
  20. ↑ Eesti Energia acquires Solidus for Nord Pool trading. ICIS. 2006-08-30. Retrieved 2013-01-19. 
  21. ↑ 21.0 21.1 Liive, Sandor (2007). "Oil Shale Energetics in Estonia" (PDF). Oil Shale. A Scientific-Technical Journal (Estonian Academy Publishers) 24 (1): 1–4. ISSN 0208-189X. Retrieved 2008-10-25. 
  22. ↑ Tere, Juhan (2010-05-12). "Eesti Energia signs oil shale concession agreement with Jordan". The Baltic Course. Retrieved 2013-01-05. 
  23. ↑ "Eesti Energia will start developing US oil shale industry" (Press release). Eesti Energia. 2011-03-09. Retrieved 2011-03-09. 
  24. ↑ 24.0 24.1 Hõbemägi, Toomas (2011-03-16). "U.S. authorities approve Eesti Energia's plan to buy OSEC". Baltic Business News. Retrieved 2011-03-16. 
  25. ↑ 25.0 25.1 Tammik, Ott (2011-03-16). "US Government Clears Eesti Energia for Acquisition". ERR. Retrieved 2011-03-16. 
  26. ↑ Tubalkain-Trell, Marge (2009-08-28). "Estonia to acquire power-grid operator from Eesti Energia". Baltic Business News. Retrieved 2010-02-06. 
  27. ↑ Tere, Juhan (2010-02-02). "Estonian Elering officially have changed owners". The Baltic Course. Retrieved 2010-02-06. 
  28. ↑ Copley, Caroline (2010-05-12). "Estonia appoints advisers for Eesti Energia IPO". Reuters. Retrieved 2013-01-19. 
  29. ↑ Hõbemägi, Toomas (2010-05-14). "Eesti Energia IPO plans shelved". Baltic Business News. Retrieved 2013-01-19. 
  30. ↑ Luck, Taylor (2008-08-07). "Jordan set to tap oil shale potential". Jordan Times. Retrieved 2008-10-25. 
  31. ↑ "Jordan has 80-million-ton stockpile of oil shale". Jordan News Agency. 2012-12-17. Retrieved 2012-12-31. 
  32. ↑ "Enefit consortium starts tendering process for Jordan oil shale fired power plant". Jordan News Agency. 2012-06-30. Retrieved 2012-06-30. 
  33. ↑ Derhally, Massoud A. (2012-12-23). "Bids for Jordan's first oil shale power plant expected in February". Arabian Business. Retrieved 2013-01-04. 
  34. ↑ Diel, Scott (2011-05-09). "A Company Bigger than the Nation Itself". ERR. Retrieved 2013-01-05. 
  35. ↑ "Outotec and Eesti Energia to establish a Joint Venture for development of oil shale processing" (Press release). Outotec. 2008-11-03. Retrieved 2010-03-09. 

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