Neste, Veolia & Borealis JV new heat power plant in Finland

Neste, Veolia & Borealis JV for new heat and power plant in Finland

10:32 AM, 16th December 2015
Neste, Veolia & Borealis JV for new heat and power plant in Finland

PORVOO, FINLAND: Borealis AG said that it has agreed with Neste Corporation and Veolia Environnement SA to create a joint venture company to build a new combined heat and power plant, produce and supply steam and other utilities to Neste’s refinery and Borealis’ petrochemical plant in Porvoo, Finland.

The JV, Kilpilahti Power Plant Limited (KPP) will be owned 40 percent each by Neste and Veolia and 20 percent 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 financing deals which are expected to take place during the first quarter of 2016.

Neste first announced its plan to replace the current power plant in May 2013.

Borealis and Veolia both first announced this planned joint venture in October 2014.

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,” said Matti Lehmus, executive VP, oil products, Neste Corporation.

KPP will build four new steam and power generation assets with an installed capacity of 450 megawatt thermal and 30 megawatt electrical running on side streams from the refineries as well as natural gas, with asphaltene being the main fuel.

The total investment is expected to be around €400 million, of which an estimated €350 million for the new power plant. The resulting new power plant is expected to be in operation during 2018.

“The new power plant will secure our long-term reliable energy supply for our operations in Porvoo on a competitive basis,” said Markku Korvenranta, executive VP, base chemicals, Borealis.

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-year operations and maintenance contract with KPP for an estimated value of €350 million.

“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 Mikael Jansson, CEO, Nordic countries, Veolia.

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