Selling pellets in Denmark

January 15, 2001, 14:30 CET

Statoil is to start selling wood pellets in Denmark and has signed a purchase agreement with the Danish pellets producer Spanvall.

Signed on 14 January, the deal means that Statoil will take over Spanvall's register of roughly 1,400 customers, who buy a total of 17,000 tonnes of wood pellets annually.

This constitutes about seven per cent of the overall Danish pellet market and it is double the amount of Statoil's turnover of wood pellets in Norway.

"The deal will enable Statoil to sell and distribute pellets all over Denmark. We can increase the sales volume threefold without extra investments," says Ewa Maria Grabarczyk in the Nordic energy unit of Manufacturing & Marketing.

Customers are private households and small firms on the Jutland peninsula and on the principal island of Zealand.

The sale also includes the acquisition of a warehouse on Jutland and a leasing deal for a depot on Zealand. Statoil will buy pellets for the Danish market from Spanvall's subsidiary in Latvia.

In Sweden, Statoil sells about 22,000 tonnes of wood pellets per year. The demand is great from households that have converted from oil heating.

"We had expected to sell about 1,000 tonnes of pellets in sacks between October and April/May. But we have already sold that amount," notes Ms Grabarczyk.

She adds that Statoil has met an enormous interest for pellets in the private market, in both Sweden and Denmark, "High oil prices and new taxes on heating oil make biofuel an attractive choice for consumers."