4. OIL

Infrastructure

Refining

There are no oil refineries in Estonia. Past considerations, by Eesti Energia and VKG, to build domestic refining capacity to produce transportation quality fuels from shale oil have not been developed to date. As a consequence, shale oil production is either exported for further processing or used as a bunker fuel. However, with the growing volumes of shale oil, both in recent and coming years, the economic case could become stronger for building a refinery capable of supplying both the domestic and export markets. Moreover, changes to maximum levels of sulphur content of bunker fuels, starting in 2020 under the International Maritime Organization (IMO) standards, will mean that shale oil can no longer be used directly as shipping fuel, bolstering the case for developing the ability to refine this into higher value oil products.

Ports and road network

Estonia does not have an oil pipeline network. It relies on its numerous seaports and rail to import oil products; fuels are distributed throughout the country by tanker trucks. Most liquid fuels are imported by rail from the Mažeikiu refinery in Lithuania (Orlen Lietuva), which is the only refinery in the Baltics, or by ship from Finland (Neste refinery in Porvoo) and from other countries.

There are 19 commercially operating oil terminals in Estonia, consisting of 12 sea terminals and 7 inland terminals. The most important seaports handling oil products are: the port of Tallinn-Muuga Harbour (Estonia’s largest port); the port of Sillamäe, which is the eastern-most port in the European Union; the Paldiski harbour; and the port of Kopli (Tallinn). All of these oil terminals are equipped with loading and storage capacity for oil products, and while some have also developed rail infrastructure connected to the backbone of the Estonian rail network for further distribution of goods, rail is not used for the distribution of oil products from ports.

Storage

There is extensive storage capacity in Estonia, enough to store roughly twice the level of annual demand in 2018, due to the fact that the country has historically had a very active oil transit business. There has, however, been a considerable decline in transit cargoes from exporting countries such as Russia since 2007.

In total, Estonia has over 3.2 million cubic metres (mcm) of oil storage capacity (20.3 million barrels [mb]), primarily concentrated along the coast. The bulk of this capacity is at the Port of Tallinn’s Muuga Harbour, which has a total storage capacity for oil products, mainly diesel and gasoline, amounting to 2 mcm (12.6 mb). The Port of Sillamäe has the largest capacity (0.5 mcm or 3 mb) for the storage of oil products. Estonia’s inland storage facilities – Maardu (close to Tallinn), Viljandi and Tartu – have a combined total capacity of about 130 000 m3 (roughly 820 kb), mostly dedicated to the storage of gasoline and diesel.

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