July 6 (UPI) -- Norwegian energy company Equinor said Friday it agreed to take over a Danish energy trading company in an effort to add support to portfolio diversification.
Equinor on Friday agreed to pay $468 million to acquire Danske Commodities. With last year's trade volume in electricity equaling twice what the Norwegian economy consumed, the trading company is one of the largest short-term traders in electricity in the European market.
The Norwegian energy company, which changed its name this year from Statoil to take "oil" off its nameplate, said the transaction supports its effort to become a more broad-based energy company. By 2030, Equinor expects to designate as much as 20 percent of its total spending on new and low-carbon energy solutions.
"Danske Commodities' trading platform and geographic footprint will support our strategy through leveraging DC's material trading position in electricity and natural gas," Jens Økland, Equinor's executive vice president for marketing, midstream and processing, said in a statement.
Electricity trading deals with demand, or load, and supply-side issues like availability, fuel prices and generation. Danske Commodities traded 318 terawatts hours of electricity across 37 countries last year. One terawatt is the loose equivalent of 1.3 billion horsepower.
Danske Commodities keeps most of the senior management in place for at least another year. CEO Henrik Lind said the arrangement lends to continuity while both entities push for low-carbon options.
"Under Equinor's ownership Danske Commodities will benefit from a stronger financial position and a portfolio of gas and renewable assets across Europe that can be optimized in the short-term dynamic market and give us further trading opportunities," he said.
Last year, the Norwegian energy company, one of the more robust producers in the world, said it reached its target of cutting 1.2 million tons worth of emissions of carbon dioxide from its portfolio three years ahead of schedule.
Equinor aims to cut emissions of CO2, a potent greenhouse gas, by another 2 million tons by 2030.
Drawing electricity from renewable resources, Norway designates nearly all of its oil and gas production to the regional market