CAPITAL: Helsinki
MONETARY UNIT: Markka
REFINING CAPACITY: 200,000 b/cd
OIL PRODUCTION: 0
OIL RESERVES: 0
GAS RESERVES: 0
Finland`s Ministry of Trade and Industry began negotiations to merge the country`s largely state-owned petroleum and electric power companies.
The ministry said there were strong economic and strategic arguments for combining oil and gas firm Neste Oy, owned 81% by the state, and 100% state-owned Imatran Voima Oy (IMO).
The government reportedly was concerned about Neste`s plan to expand into power generation, in competition with IMO.
A ministry study said combining the two firms would create a major company that could compete internationally as European electricity and gas markets are liberalized.
A combined firm would allow Neste/IMO to operate electric power plants in Scandinavia and elsewhere and to generate power within Finland for export via linked transmission grids.
The ministry said the proposed reorganization would not affect the structure of the management or employees of the two companies.
Borealis AS planned to boost production capacity at its Porvoo polyethylene plant to 140,000 metric tons/year from 120,000 metric tons.
The $6.8 million expansion was to be done during a 2-week shutdown late in summer 1998. The plant opened in 1996 and uses Borealis`s Borstar process.
Transportation
Neste Oy and Russia`s Gazprom formed a 50-50 joint venture, North Transgas Oy, to build a pipeline to take gas from Russia into Finland and then on to Sweden and the European Union gas market.
Russia currently exports 3.5 billion cu m/year of gas to supply Finland`s domestic market. Under the agreement, Finland could take 4.5 billion cu m/year in the next few years.
The joint venture would lay a pipeline to carry about 45 billion cu m/year of Russian gas through southern Finland to the west coast, across the Gulf of Bothnia to Sweden, and then south to Europe.
A feasibility study was under way. Construction would begin in 1999 or 2000. Goal was to begin operations in 2005.
The project would compete with the Nordic Gas Grid project, which would link Scandinavia`s and Germany`s pipeline networks.
