A merger between two Swedish biopellets plants owned by Statoil and Västerbrändsle respectively has been agreed by the two companies.
Being named Statoil Vänerpellets, the new unit will be owned 20 per cent by Västerbrändsle and 80 per cent by Statoil.
Statoil began producing biopellets in Sweden last autumn, when it acquired Vänerbygden Pellets at Säffle in the central part of the country.
The merger with Västerbrändsle's facility at Kil in the same region will bring its Swedish output of this product to 20-22,000 tonnes per year, reports Ewa Maria Grabarczyk. She heads the green energy unit in Statoil's Marketing & Energy business area.
Production could be expanded to 30,000 annual tonnes if market conditions justify this.
Biopellets are produced from forest industry waste and have an energy content two-five times higher than unprocessed biofuel.
Ms Grabarczyk believes they represent a competitive energy source which is likely to enjoy growing demand.
At the moment, Statoil delivers biofuel to two heating facilities in Norway and 13 in Sweden. And roughly 40,000 Swedish households now heat their homes with biopellets.
The group also operates a pellets plant at Brummunddal north of Oslo in partnership with forest products giant Norske Skog. In operation since last autumn, this facility can produce 8,000 tonnes per year.