CHANGES IN PROFITABILITY AND COST ESTIMATES OF THE DIESEL PROJECT AT PORVOO REFINERY

 

Neste Oil has updated profitability and cost estimates of the ongoing upgrade (Diesel project) of Porvoo refinery. The key market drivers of the project have continued developing favorably throughout 2005. It is now estimated that the Diesel project will increase Neste Oil's total refining margin for the annual production of 100 million barrels by over USD 2 /bbl compared to the previously estimated level of at least USD 1 /bbl.

 

However, as a consequence of improvements in design and higher-than-expected international steel prices at the time when the largest process units and structures were ordered, the cost estimate for the project has been increased by approximately 10% over the earlier budget of EUR 532 million.

 

At the site the Diesel project is progressing to schedule. Three extremely heavy process reactors were transported and erected successfully in May and June. The first revamp sub-projects will be completed during the scheduled maintenance shutdown of the refinery in August-September, and the new production line is expected to come on stream in late 2006, as planned.

 

Once completed, the Diesel project will increase Neste Oil's annual production capacity of sulfur-free diesel fuel, and reduce production of heavy fuel oil. The Porvoo refinery will also be able to switch completely to using heavier, sourer crude input.

 

 

Neste Oil Corporation

Osmo Kammonen

Senior Vice President, Communications

 

 

Neste Oil Corporation is a leading independent Northern European oil refining and marketing company, with a focus on high-quality traffic fuels for cleaner traffic. Neste Oil's refineries are located in Porvoo and Naantali, Finland, and have a total refining capacity of approx. 250,000 bbl/d. Net sales in 2004 totaled some EUR 7,900 million, and the company employs around 4,400 people. Neste Oil is listed on the Helsinki Stock Exchange (symbol: NES1V). For further information, see www.nesteoil.com.