Estonia plans $260 mln oil shale plant, eyes nuclear

TALLINN Fri May 22, 2009 1:55pm BST

TALLINN May 22 (Reuters) - The state-owned power company of the Baltic state of Estonia said on Friday it would invest 3 billion kroons ($264.2 million) in building a new oil shale plant and would consider nuclear generation in the future.

Estonia is more than 90 percent dependent for power on burning oil shale and imports gas from Russia. It has said it might consider producing its own nuclear power as a planned new nuclear power power plant in Lithuania has been delayed.

As well as the 3 billion kroons cost for the oil shale plant, the Estonian Energy company said it planned to buy two power units of a combined capacity of 800 megaWatts.

"Since our long-term goal is to also diversify our production portfolio, a future alternative to the second 400 MW unit could be nuclear energy instead," it added in a statement.

"The construction of the plant will commence this year and the start-up of the oil plant will take place in 2011," it said.

The new plant will use 2.26 million tonnes of oil shale per year, producing 290,000 tonnes of oil from shale oil and 75 million cubic meters of gas, which is used in electricity generation.

The costs of the generating units would become clear once a procurement process finished in 2010 and a final investment decision made. Power generation from a first unit was planned to start in 2015.

All three Baltic states are eager to decrease their energy dependency on Russia, but they have been slow to implement plans.

Lithuania has faced many delays in deciding on a replacement for its Ignalina nuclear power plant, due to be closed at the end of this year. It and Latvia have also argued about the route of a power cable link to Sweden. (Reporting by David Mardiste, Editing by Peter Blackburn)

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