Offshore staff
STAVANGER, Norway — Equinor has entered a swap transaction with bp concerning two wind farm developments offshore the US east coast.
It would mean Equinor taking 100% ownership of Empire Offshore Wind Holdings LLC, comprising the Empire Wind lease and projects. And bp would assume outright ownership of Beacon Wind Holdings LLC, covering the Beacon Wind lease and projects.
Equinor will also take on bp’s 50% share of the South Brooklyn Marine Terminal (SBMT) lease, while bp, as full owner of Beacon Wind Holdings LLC, would also own the associated project company that holds the Astoria Gateway for Renewable Energy site.
According to Equinor and bp, the cash-neutral arrangement gives both companies the flexibility to pursue their respective priorities under their corporate strategies. The transaction is subject to regulatory approval but should close by this summer.
Following the agreement, Equinor submitted a bid for the Empire Wind 1 project in New York’s fourth offshore wind solicitation round, which closed yesterday afternoon.
The company has struck a deal with the New York State Energy Research and Development Authority (NYSERDA) to terminate the Offshore Wind Renewable Energy Certificate (OREC) purchase and sale agreement for the Beacon Wind 1 project.
Both Empire Wind 1 and 2 have been impacted by supply/cost issues. Empire Wind 2 will be matured for future solicitation rounds, Equinor added.
Taking full ownership in the two projects and SBMT lease will likely lead to an increased capex for the company of about $1.2 billion this year and $1.5 billion in 2025, ahead of any project financing.
Development of Empire Wind 1 remains contingent on a positive outcome to the NY4 solicitation, but FID could follow in mid-2024. Equinor intends to bring in a partner at some point to reduce its ownership share and costs exposure.
The company secured the Empire Wind lease in 2017. Empire Wind 1 has a planned capacity of 810 MW and Empire Wind 2 above 1,200 MW.
In 2019 it gained the Beacon Wind lease. Beacon Wind 1’s planned capacity is 1,230 MW, and Beacon Wind 2’s capacity could be 1,360 MW. bp farmed into a 50% share of both assets for $1.1 billion.
Equinor won an offtake contract with the state of New York for Empire Wind 1 in 2019, and the two companies were awarded offtake contracts for Empire Wind 2 and Beacon Wind 1 under New York’s second solicitation round.
01.26.2024
