Foundation stone ceremony at Neste Oil's NExBTL renewable diesel plant in Singapore

Taken from: Fox Business News

Friday, March 06, 2009

ESPOO, FINLAND, Mar 06, 2009 (MARKET WIRE via COMTEX) ----- project proceeding on schedule and budget

Neste Oil held today a Foundation Stone Ceremony to officiate the construction of its EUR 550 million NExBTL renewable diesel plant in Singapore. Neste Oil's President and CEO Mr Matti Lievonen was in attendance, and Mr Lim Hng Kiang, Minister for Trade and Industry, Singapore was the Guest-of-Honour at the event.

"The construction of our NExBTL renewable diesel plant in Singapore is proceeding on schedule and on budget. The market has been highly unpredictable in the past year but the Singapore plant plays an important part in our long-term strategy for growth, and our commitment to the project remains solid. We are very grateful to the local government for the support they have given us and look forward to when the plant is officially inaugurated in 2010," stated Mr Matti Lievonen.

Upon completion in 2010, Neste Oil's renewable diesel plant in Singapore will be the largest in the world with an annual capacity of 800,000 metric tons. Neste Oil's patented NExBTL technology allows flexible use of any vegetable oil or animal fat in the production of NExBTL renewable diesel, the cleanest diesel in the world. NExBTL-diesel is the only renewable diesel in the world that is fully compatible with existing diesel engines and logistics systems. The use of NExBTL-diesel significantly reduces greenhouse gas and tailpipe emissions compared to even the best fossil fuels, thereby contributing to better air quality. Feedstock, to be used at the NExBTL renewable diesel plant, are animal fat, palm oil and other types of vegetable oils. When fully operational, the plant will employ around 100 people.

Neste Oil Corporation

Osmo Kammonen Senior Vice President, Communications

More information: Mr Jarmo Honkamaa, Deputy CEO and Executive Vice President, Renewable Fuels, tel. +358 10 458 4758

About Neste Oil

Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company's strategy is based on growing both its oil refining and premium-quality renewable diesel businesses. Neste Oil's refineries are located in Porvoo and Naantali and have a combined crude oil refining capacity of approx. 260,000 barrels a day. The company had net sales of EUR 15 billion in 2008 and employs around 5,200 people. Neste Oil's share is listed on the NASDAQ OMX Helsinki. www.nesteoil.com.

About NExBTL renewable diesel

NExBTL renewable diesel is an advanced fuel, based on renewable raw materials, that performs more efficiently and has a lower level of environmental impact than fossil diesel or FAME-type biodiesel. Neste Oil requires its raw material suppliers to commit to responsible and sustainable production methods. Feedstock of this type ensures that NExBTL renewable diesel has a 40-60% lower level of greenhouse gas emissions over its entire lifecycle compared to fossil diesel. NExBTL renewable diesel can be blended with conventional diesel fuel or used as such, and it is suitable for all diesel engines.

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Copyright Copyright Hugin AS 2009. All rights reserved.

SOURCE: Neste Oil Oy

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From The Business Times, Singapore

Growing Market for Singapore Renewable Diesel Plant

By RONNIE LIM

OTHER investors may be scrapping their projects but it's flashing 'green' for Neste Oil's $2.4 billion investment in Singapore and Rotterdam. The Finnish giant is brimming with confidence about its two renewable-diesel refinery plants that cost $1.2 billion apiece and that will start operations in 2010 and 2011 respectively.

DOING THE SPADE WORK (From left) Mr Honkamaa, Mr Lim, Mr Lievonen and Neste Oil managing director Olli Virtas laying the foundation for Neste Oil's renewable diesel plant in Singapore

In fact, it is already considering adding second lines at both to produce either more renewable diesel, or even renewable jet fuel for aircraft.

'We have no other competitor in 2G, or second-generation, biodiesel manufacturing,' Matti Lievonen, Neste's president and CEO, told media after a foundation stone-laying ceremony at its Tuas site. The two plants, when completed, will make Neste - until now, mainly a traditional oil refiner - the leading global producer of renewable diesel.

Both plants are 'on schedule and on budget', he said. Financing is not an issue at all, as Neste has a credit line of 1.6 billion euros (S$3.1 billion) until 2011, plus it has over 500 million euros in cash flow from last year.

Besides, given growing environmental concerns, the European Union is expected to pass legislation enforcing greater use of such renewable fuels soon. 'This is the whole logic for our renewable diesel - a market which mandates use of biofuels,' said deputy CEO Jarmo Honkamaa.

After earlier targeting 5.75 per cent mandatory biofuel use by 2010, the latest EU directive is that measures must be taken by all member countries to replace a minimum 10 per cent of all transport fossil fuels (petrol and diesel) with biofuels by 2010.

The Neste officials said this in response to questions on whether today's low oil prices of around US$40 - which means that normal diesel is roughly half the price of biodiesel - would impact the economics of its Singapore and Rotterdam biodiesel investments.

Each plant will produce 800,000 tonnes per annum (tpa) of renewable diesel - the largest such facility in the world - from one million tpa of renewable materials comprising vegetable oils such as palm oil, animal fat or tallow.

Neste - which operates two crude-oil refineries in Porvoo and Naantali with a total capacity of 260,000 barrels - already has a 170,000 tpa biodiesel plant at Porvoo, and is set to start up a second biodiesel plant of similar scale there this July.

'Neste is sourcing its biodiesel raw materials like palm oil and tallow on a group-wide basis, and is in talks with suppliers, like for instance, for jatropha in Thailand,' Mr Honkamaa said. Depending on the costs, over half of each plant's raw materials can be palm oil, with the rest tallow, although the biofuel refineries are completely flexible in their feedstock mix.

Neste is already in talks with big oil companies to take biodiesel from its Singapore and Rotterdam plants. 'We don't see a challenge in (securing) markets, the challenge is more in raw materials,' Mr Honkamaa said.

Speaking at the ceremony, Trade & Industry Minister Lim Hng Kiang said that Neste's project 'affirms Singapore's position as a trusted business destination', adding that 'the outlook of the energy and chemicals industries remains positive'. Underlying this, he said, are two main factors: the increasing emphasis on addressing environmental challenges and the Asian growth story, especially in China and India, and increasingly, Asean.