4Fields of activity
Our goal and one of the most important principles is adding the value to the oil shale processing value chain and its extension. The existing value chain at VKG is the longest in Estonia and one of the longest in the world.
The main fields of activity of Viru Keemia Grupp:
Introduction of the areas of activity
The excavation of oil shale at VKG takes place at the Ojamaa mine, which is the most recent in Europe and the first new mine in Estonia that was built after regaining independence. Since the layer of oil shale is deposited in the bed that is more than 30 metres deep, underground extraction is used at Ojamaa.
Every day about 150 units of wheeled machines are working underground, and 27 km of conveyors are used on a regular basis. Mining provides employment to about 540 people. By a good tradition, the friendly team of the mine selects the best of the best each year, who are awarded an honourable 'Honorary Miner' title. The best workers are also acknowledged on the last Sunday of August, i.e. on the Miners’ Day. So far, 57 workers of the Ojamaa mine, whose work has been acknowledged by their co-workers and the management of VKG, have been awarded this title.
The total surface area of the Ojamaa mine is 23,7 km2
The excavated area since the opening of the mine has been 9 km2
The annual production capacity is 4,5 million tons of oil shale
Availability of oil shale resource
VKG assesses the availability of the oil resource in the short-term perspective, i.e. current supply, and in the long-term perspective, i.e. future supply.
Current supply
Considering all the oil production capacities, VKG’s need for oil shale is a total of 4.1 tons of the geological resource a year (i.e. 5.1 million tons of commercial shale a year). Although Estonia has sufficient oil shale resources and the enterprises that consume oil shale are generally able to cover their own raw material needs, VKG is an exception here, as its reprocessing capacity has for years exceeded the maximum limit of the mining permits issued to the enterprise.
The mining permits issued to VKG allow the extraction of 2.77 million tonnes of the geological resource at the Ojamaa Mine, from which approximately 3.5 million tons of commercial oil shale can be produced. In the case that the other market participants have in the preceding 7 years not extracted their allowed volume in the full extent and provided that the overall extraction of oil shale in Estonia remains within the maximum of 20 million tons of the geological resource, VKG can increase its oil shale production to 3.5 million tons of the geological resource (4.35 million tons of commercial oil shale) through the retrospective extraction mechanism. Considering that the current maximum annual oil shale consumption capacity in Estonia is limited to 15 million tons and that the mining permits of all the other consumers considerably exceed their resource needs, VKG holds that the law is discriminating and obsolete and should be amended as soon as possible.
Even upon using the retrospective extraction mechanism, VKG’s oil shale deficiency is still 0.7 million tons of the geological resource (0.9 million tons of commercial oil shale) a year. The deficiency is currently being covered with purchases from Kiviõli Keemiatööstus and Enefit Kaevandused, but as there is not actual competition situation in the oil shale market, VKG cannot construe these solutions as stable in the long run. The termination of those contracts would mean a partial shutdown of production.
Future supply
As at the end of 2019, the remaining geological resource at the Ojamaa Mine amounts to 52 million tons. Considering the various restrictions and extensions and VKG’s achieved extraction volumes, the Ojamaa Mine will cover VKG’s raw material needs approximately until the end of 2030. As the processes related to mining permits are excessive and time-consuming, VKG has for years been seeking for solutions to ensure long-term security of supply.
In that regard, 2019 was of iconic significance for VKG, as after years of disputes we managed to agree on the division of the Uus-Kiviõli mining field with Eesti Energia. The mining permit issued to VKG in August 2019 for a third of the Uus-Kiviõli mining field will ensure the Group with raw materials for another 15 to 20 years. With regard to environmental protection, this was the right solution, as the said mining field is logistically at the best possible location in terms of VKG’s oil shale processing units in Kohtla-Järve and allows the maximum use of the existing infrastructure. The oil shale enrichment plant at the Ojamaa Mine will be able to ensure the processing of the production from the new mining fields and there is no need to perform additional aboveground construction works and disturb the nature.
Constant development and a desire to more forward, the hardworking and friendly team, integrity and striving towards a common goal – it all unites us, the people of Ojamaa! I sincerely thank every employee of the Ojamaa Mine for their commitment and their work done from the heart.
Member of Management Board of VKG and VKG Kaevandused
Constant development and a desire to more forward, the hardworking and friendly team, integrity and striving towards a common goal – it all unites us, the people of Ojamaa! I sincerely thank every employee of the Ojamaa Mine for their commitment and their work done from the heart.
Member of Management Board of VKG and VKG Kaevandused
Shale oil
The main product of VKG is shale oil, which is obtained in the result of the processing of oil shale.
We have been dealing with shale oil production since 1924. We have been processing oil shale using the Kiviter technology for over 80 years, and since 2005, we have been developing the Petroter technology, too: Petroter I (2009), Petroter II (2014) and Petroter III (2015). The aggregate processing capacity of six production units is 5 million tons of oil shale a year, of which the Petroter plants make up 70%.
Kiviter oil plants are operating on the basis of lump oil shale, and oil is manufactured in vertical retorts, where gas is used as a heat carrier. The plants that are operating on the basis of Petroter technology use fine oil shale, and the manufacturing process takes place in horizontal retorts, while ash is used as a heat carrier.
Last year, the Group’s oil plants processed 5 million tons of shale oil (+5,5%), from which 659 000 shale oil products were made (+5,6%). The increase in production stemmed from the lengthening of the operating time of the three Petroter plants by 4.5%, to 944 days, as well as the extension of the additional Kiviter plant launched in June 2018 by four months.
2019 production growth
+ 5,6%
Shale oil is used due to its small viscosity, low chilling point, and insignificant sulphur content mainly in order to improve the properties of heavy fuel oils, including as an additive to marine fuels, as a raw material in the chemical industry, and as fuel for boilers and industrial furnaces. Although the majority of the production is exported, shale oil is also used locally in driers, asphalt factories, and industrial and small boilers.
Congratulations to the team of the Petroter I shale oil plant!
The Petroter I shale oil plant celebrated its 10th anniversary in December 2019!
Another important event for our Group and possibly even for the entire Estonian shale oil industry. The construction of such a huge unique plant back then required courage, determination and commitment, many overtime hours and serious brainwork from tens or even hundreds of people.
“By their nature, commissioning and configuration works do not fit within an ordinary working day. It is the same as swimming upstream in a mountain river – as soon as you tire and cease your efforts, the flow will immediately carry you back to where you started and you have to start your journey all over again. There is no time for gearing up, work is done in nonstop mode. It was hard, but we did it. Thanks to the people who moved towards the common goal with full dedication and passionate enthusiasm and despite throwbacks. Every member of the team played an important role.“
Member of Management Board of VKG Oil and VKG
At the festive opening ceremony of the plant on 21 December 2009
“By their nature, commissioning and configuration works do not fit within an ordinary working day. It is the same as swimming upstream in a mountain river – as soon as you tire and cease your efforts, the flow will immediately carry you back to where you started and you have to start your journey all over again. There is no time for gearing up, work is done in nonstop mode. It was hard, but we did it. Thanks to the people who moved towards the common goal with full dedication and passionate enthusiasm and despite throwbacks. Every member of the team played an important role.“
Member of Management Board of VKG Oil and VKG
At the festive opening ceremony of the plant on 21 December 2009
Manufacturing heat, steam, and electricity
A hundred years of experience in refining oil shale has taught us to get much more than just oil out of oil shale. Refining oil shale in VKG means the combined production of oil, heat and power, which is the most eco-friendly and economically efficient way to use this resource..
In the result of shale oil production process, oil shale gases are generated that are moved to VKG Energia, where they are used for manufacturing heat, steam, and electricity.
Heat energy is forwarded to the local central heating system, steam is sold to production companies located in the neighborhood, and most part of power energy is consumed by the companies of the Group. In addition to that, we also use oil shale gases at the limestone plant, whose produce is consumed by our own sulphur-trapping devices that purify exhaust gases. This production chain guarantees the ultimately efficient and environmentally-friendly use of energy contained in oil shale.
In 2019, the production of electricity and heat remained at the same level as in 2018: a little over one TWh, of which 474 GWh (+2%) was made up by electricity generated from oil shale gases. The latter forms 7.4% of the electricity produced and 5.5% of the electricity consumed in Estonia in 2019. At the same time, the sale of heat to end consumers decreased by 3.3% due to the weather being warmer than the average.
VKG Energia is the second largest electricity production enterprise in Estonia.
Ahtme-Jõhvi mainline reconstruction works
In 2019, network enterprise VKG Soojus continued with the large-scale reconstruction works of the Ahtme–Jõhvi mainline, in the course of which nearly 10 kilometres of heat pipes were replaced. The renovated heating pipeline was built at the end of the 1960s and at the beginning of the 1970s and its problem-free period of operation is starting to run out in the near future. Above all, the new heat pipes will ensure a stable and high-quality service to clients, reduce heat losses, and improve the reliability of the heat pipeline.
The total cost of the project is more than 4 million euros with a partial co-financing from the Environmental Investment Centre (EIC).
Over 30,000 clients in Narva, Narva-Jõesuu, and Sillamäe
The sale of electrical power and network services is handled by VKG’s north-east Estonian subsidiary VKG Elektrivõrgud. The company’s service area includes Narva, Narva-Jõesuu and Sillamäe.
In 2019, the volume of the network services of the enterprise grew by 3.3% compared to 2018, amounting to 250.8 GWh. The main influencing factor was an increase in the consumption volumes of corporate clients. The sale volume of electricity dropped by 5%, amounting to 104 GWh.
Every year, VKG Elektrivõrgud invests considerable amounts in the maintenance of power lines, substations and other equipment, increasing the reliability of the network and reducing network losses. In 2019, nearly 1.92 million euros were invested in the development of the network and the improvement of reliability. The enterprise pays a lot of attention to electrical safety and constantly organises further training for its employees.
The enterprise started the implementation of the IFS asset management programme and the new ArcGIS geo-information system in 2019, with plans to complete it during 2020. The said solutions allow us to more efficiently manage assets and improve the planning of maintenance works and investments.
Oil shale chemicals
In addition to electricity, heat, and oil, different chemical products are also manufactured from oil shale. VKG still remains the only company in Estonia that manages to obtain valuable chemicals from phenol-water that is separated in the course of oil production at Kiviter plants. Our fine chemicals have a high purification level, i.e. over 99%.
Oil shale chemistry can be divided into two groups: oil shale chemicals (alkyl resorcinols fractions) and fine chemicals. The first group is widely used in rubber and plywood industry, the production of moulded forms, etc. The second group includes products with a high level of purity, which are used in cosmetics, perfume manufacture, and electronics. The main field of application of fine chemicals is the synthesis of medications and the manufacture of hair dyes. For example, fine chemicals produced in Estonia can be found in the products of such companies as Keune, Estel, and Schwarzkopf. Besides, they are used in the process of production of liquid crystals for LCD monitors.
Oil shale phenol fractions are used in the form of resin adhesives in the tyre, plywood, and oil industries and in the process of manufacture of tyres with high durability level (Goodyear, Pirelli and Bridgestone) as well as in the manufacture of Lexus and Toyota spare parts.
In 2019, we produced 1,520 tons of fine chemistry and phenol products, which were sold by the company both to Estonian and foreign customers. The chemicals produced at VKG were mainly sold to the markets in Great Britain, India, Italy, Belgium, and the USA. Now we are dealing actively with the expansion of our customer database for marketing standardized fine chemicals.
The production of fine chemicals contributes to the development of the national economy and oil shale industry since they are manufactured from the by-products of oil shale processing. The troublespot of oil shale chemical industry is still a high amount of expenses for research and development activities and marketing expenses. In addition to that, in connection with the so-called REACH regulation adopted by the European Union, the companies that produce chemical substances must register them, which is also accompanied by a significant amount of expenses.
More information about fine chemicals is available here
www.finechem.eu
Limestone production
VKG lime plant operates from summer 2014. The factory uses limestone from Karinu quarry, which is used to produce lime necessary for the operation of desulphurization device.
Semi-coke and generator gases deriving from the production processes of shale oil are used to get energy for decarbonisation. Both the purified char gas and the mixture of semi-coke and generator gases can be used in the operating process. To mix and dose gases, a modern mixing unit has been built. It was developed by Viru Keemia Grupp and is a unique solution developed in Estonia for limestone production
In 2019, the plant produced ca 27,310 tons of limestone, which was used in full extent in the process of binding sulphides contained in flue gases. In March, 2,553 tons of limestone was produced, which is a record-breaking amount since the start of the operation of the burner. The capacity of the lime plant's production fully covers all current and future needs of VKG, and, in addition to that, it provides an opportunity to sell a certain amount of limestone to consumers outside of the Group.
Some of the products of desulphurization found use in agriculture. The Agricultural Board confirmed that the product complies with quality requirements set for lime fertilizers in the Fertilizers Act, which is also proven by a certificate issued to the company.
TurnKey solutions
The Group’s subsidiary Viru RMT is an engineering and project management centre with diverse know-how operating in the international market. The company has several decades of experience and offers repair and assembly services as well as the production, installation and maintenance of metal structures and metal components.
Ettevõte on välja kasvanud endise põlevkivikeemiakombinaadi remondi- ja montaažiosakonnast, seega omab suuri kogemusi remondi- ja montaažiteenuste osutamise vallas.
Areas of activity of Viru RMT
- electrical works from the lamps in the ceiling to transforming substations
- design, production and installation of technical equipment
- automatic management systems design, software development and installation
- installation and repair of control and measuring instruments
- maintenance and repair of lifting equipment, and lifting works;
- implementation of turnkey technical solutions
Major projects commenced and implemented in 2019
- The 2nd stage of the construction of the Ahtme heat mainlines of VKG Soojus;
- Construction of the district heating pipes of the Kadrina small town for EG Ehitus AS;
- Installation of a constant measurement system of flue gases on oil production equipment for KKT Oil OÜ;
- Replacement of the 6kV distribution equipment at the Perjatsi 35/6 kV substation for VKG Elektrivõrgud;
- Automation of the truck container loading station;
- Modernisation of the automatics of the railway loading station.