Virši-A plans to start biomethane production in the new factory in the second half of 2025

The energy resource trader AS “Virši-A”, which operates under the brand “Virši”, plans to start biomethane production in the new factory in the second half of 2025, said Jānis Vība, chairman of the board “Virši -A”, on Friday in a webinar about the financial results of the first half of 2024.

The biomethane plant, which will be built by “Virši” in cooperation with the project partners, will be located in the Vidzeme region, but Vība has not revealed its exact location yet.

The company has attracted EUR 12 million in funding from the European Energy Efficiency Fund, and the total costs will reach around EUR 15 million.

“Currently, we are in the final stages of planning and building permit issues, so that we can start construction. Earthworks are planned to be carried out this year, while technology and equipment issues are planned to be implemented next year, so that we can start biomethane production by the end of 2025,” said Vība.

He explained that there are mainly three reasons why the company decided to start this project. First, the project has a good financial result, since the biomethane produced will be exported mainly to European markets.

“Not only in the transport sector, but also in other sectors, the demand for biomethane is high, because it is necessary to show that companies also use this “green” energy,” said the head of “Virši “.

The second aspect is the good location of the factory in Vidzeme. It is surrounded by large farmers’ farms, which generate the necessary raw materials – fertilizers, to first produce biogas and then purify it into biomethane. There is also a gas line next to this location. As a third reason, Vība mentioned that the project is a good way to diversify a business model in the long term.

“Thus, “Virši” also reduces dependence on products from the fossil sector, and biomethane is a good way to continue this “green” direction in the company’s business model,” said Wieba.

Representatives of “Virši-A” confirmed to the LETA group that the company and its partners have established a joint venture – SIA “Livland Biomethane”, which will be responsible for creating a biomethane plant. Viba revealed that “Virši-A” wants to acquire a share of the company’s capital in the long term, thus becoming the largest partner.

Information on “Firmas.lv” shows that “Livland Biomethane” was registered in March 2023. It is half owned by SIA “QLC” managed by Renārs Miķelsons and SIA “RG Services” managed by Miķelsons. Vība explained that parts of the registration of capital shares with the name “Virši-A” are in the process and that the documents have been submitted to the Enterprise Register.

At the same time, Vība said that in the field of transport decarbonization, or to reduce the impact of the transport sector on the environment, the company currently also offers compressed natural gas products at nine stations. The increase in consumption of compressed natural gas in the “Viršu” network reaches 47%.

He also mentioned that the market share of electric cars in Latvia is about 1% of the total vehicle market, however, the company sees potential in this area and has opened three new charging stations in first half of this year, offering a total of 17 download locations.

He noted that in the coming years, due to changes in the law, an increase in the cost burden for fossil fuel types is expected, so it is necessary to think about how to diversify the business model.

The turnover of the concern “Virši-A” in the first half of this year was 185.323 million euros, which is 14.1% more than in the corresponding period last year, but the profit of the concern decreased by 36.4% – to 2.007 million euro .

LETA has already announced that the new plant will use closed anaerobic fermentation technology, processing agricultural manure into bio-methane. The main construction partner is a selected company based in Germany with over 20 years of experience in successfully implementing over 300 biogas / biomethane projects.

The plant’s planned annual biomethane production is 60 gigawatt hours (GWh) and is expected to replace up to 5.6 million cubic meters of natural gas per year.

As reported, the audited turnover of concern “Virši-A” last year was 343.732 million euro, which is 8.4% less than in 2022, but the profit of the concern decreased more than twice and was 5.099 million euros. Among them, in the first half of last year, the turnover of the concern “Virši-A” was 162.373 million euros, and the profit of the concern was 3.141 million euros.

“Virši-A” concern includes the parent company “Virši-A”, SIA “Virši logistika”, SIA “Virši Renergy”, “Virši Lietuva” and AS “CRYO Baltic”.

According to the information published by the company, the largest shareholders in the company are Jānis Riekstiņš (21.03%), Jānis Rušmanis (20.86%), Ruta Plūme (20.83%), Andris Priedītis (12.82%) and Ilgvars Zuzulis (12.8%). %). From November 11, 2021, the company’s shares have been included in the alternative market “First North” of “Nasdaq Riga”.