Neste, Veolia, and Borealis have agreed to create a joint venture company to build a new combined heat and power plant and produce and supply steam and other utilities to Neste’s refinery and Borealis’ petrochemical plant in Porvoo, Finland.
The company, Kilpilahti Power Plant Limited (KPP), will be owned 40% each by Neste and Veolia and 20% by Borealis. Neste will contribute its required equity share in KPP by transferring the current power plant to the joint venture company. The arrangement is subject to the finalisation of the financing agreements. Agreements are expected to take place during 1Q16.
“We have combined forces to build this modern power plant, and from 2018 onwards its customers will have a more secure, efficient and clearly cleaner power source,” commented Matti Lehmus, EVP Oil Products at Neste Corp.
KPP will build four new steam and power generation assets with an installed capacity of 450 MW thermal and 30 MW electrical running on side streams from the refineries as well as natural gas, with asphaltene being the main fuel. The total investment is approximately €400 million, of which an estimated €350 million for the new power plant. The resulting new power plant will comply with the latest environmental regulations, including the European Commission’s Industrial Emissions Directive (IED), and is expected to be in operation during 2018.
"This joint venture will deliver safe and reliable energy supplies, and support the sustainable development of our Porvoo location,” added Thomas van de Velde, Borealis Vice President Hydrocarbons & Energy. "This joint venture will secure our long-term reliable energy supply for our operations in Porvoo on a competitive basis."
Veolia Services Suomi Oy, a subsidiary of Veolia Nordic AB, will take over the operating staff of the existing power plant from Neste and enter into a 20 years operations and maintenance contract with KPP for an estimated value of €350 million over the period.
“The cooperation with Neste and Borealis constitutes an important milestone for Veolia in the Finnish and Nordic energy services markets and demonstrates the attractiveness of our business model and technical and operational know-how”, said Veolia’s CEO for the Nordic countries, Mikael Jansson. “Neste and Borealis are leading companies within their respective industries and we are proud that they have entrusted us as their partner for the energy management for their operations in Porvoo.”
Edited from press release by Angharad Lock
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/16122015/neste-veolia-and-borealis-to-build-power-plant-1814/