Equinor has entered into an agreement with BP to sell 50 percent of non-operated interests in Empire Wind and Beacon Wind properties on the US East Coast for a total price prior to adjustment of $1.1 billion.
The two companies are also forming a strategic alliance for further offshore wind development in the US through this deal.
Currently, Equinor has a 100 percent stake in both the Empire Wind lease, located off the coast of New York State, and the Beacon Wind lease, located off the coast of Massachusetts. The deal is consistent with Equinor’s renewable strategy for early and on-scale access to lucrative acreage, mature projects and value capture by de-risking high equity ownership positions.
Equinor will remain the operator of the projects in these leases through the growth, construction and operation phases, and it is planned that the wind farms will be equally staffed after a period of time.
“We look forward to working with BP who share our strong ambition to grow in renewable energy. Our partnership underlines both companies’ strong commitment to accelerate the energy transition and combining our strengths will enable us to grow a profitable offshore wind business together in the US.”Eldar Sætre, CEO Equinor.
“This transaction with BP demonstrates Equinor’s ability to create value from developing offshore wind projects. Over the past decade Equinor has built world-class technical expertise in offshore wind. This has enabled us to access and high-grade wind acreage, resulting in a material, high-quality project pipeline. Optimizing equity and bringing in new partners allow us to realize value, increasing our financial flexibility to fund further growth.”Pål Eitrheim, executive vice president for New Energy Solutions in Equinor.
Through this collaboration, Equinor and BP will explore potential joint opportunities for both bottom-fixed and floating offshore wind in the US and leverage related expertise to expand together.
As the relationship grows, both companies intend to further expand this collaboration in a market that is projected to rise globally to between 600 and 800 gigawatts (GW) by 2050.
Equinor has already set out its goals to raise its renewable capacity from 4 to 6 GW by 2026 and 12 to 16 GW by 2035, and has recently announced its intention of accelerating these goals. Equinor is working to develop scale in key areas–the North Sea, the United States and the Baltic Sea–while at the same time securing growth opportunities in other selected markets for both bottom-and floating offshore wind.
BP’s acquisition of interests in Empire Wind and Beacon Wind has an effective date of 1 January 2020 and is scheduled to close at the beginning of 2021, subject to customary conditions, including price changes and approval by the authority.