Equinor has entered into an agreement with BP to sell 50% non-operated interests in the Empire Wind and Beacon Wind assets on the U.S. east coast for a total of $1.1 billion. Through this transaction, the two companies are also establishing a strategic partnership for further growth within offshore wind in the US.
The transaction marks the first step in the partnership, where Equinor will remain the operator in the development, construction and operations phase for both assets with secondary participation from BP.
Currently Equinor holds a 100% interest in both the Empire Wind lease, and the Beacon Wind lease. The transaction is in line with Equinor’s renewable strategy to access attractive acreage early and at scale, mature projects, and capture value by de-risking high equity ownership positions.
Empire Wind is located 15-30 miles southeast of Long Island, N.Y., and spans 80,000 acres, with water depths of between 65 and 131 feet. The lease was acquired in 2017 and is being developed in two phases with a potential total installed capacity of more than 2 GW.
Beacon Wind is located 60 miles east of Montauk Point, N.Y., and 20 miles south of Nantucket, Mass., and covers 128,000 acres. The lease was acquired in 2019 and has the potential to be developed with a total capacity of more than 2.4 GW.
The turbines used at each site are each expected to have an installed capacity of more than 10MW. Power generation from each site will be sufficient to power more than 1 million homes.
“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,” says chief executive officer in Equinor, Eldar Sætre.
“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,” says executive vice president for New Energy Solutions in Equinor, Pål Eitrheim.
Through this partnership Equinor and BP will consider future joint opportunities in the US for both bottom-fixed and floating offshore wind and will leverage relevant expertise to jointly grow scale. As the partnership develops, both companies hope to expand this cooperation further in a market that is forecast to grow to between 600 and 800 gigawatts (GW) globally by 2050.
Equinor has already set ambitions to grow its renewables capacity to 4 to 6 GW by 2026 and 12 to 16 GW by 2035, and has recently announced its expectation to accelerate these ambitions. Equinor is working to build scale in core areas – the North Sea, the United States and the Baltic Sea – while securing growth options in other selected markets for both bottom-fixed and floating offshore wind.
BP’s acquisition of the interests in Empire Wind and Beacon Wind has an effective date of January 1, 2020 and is expected to close in early 2021, subject to customary conditions including purchase price adjustments and authority approval.