Equinor to Take Full Ownership in Empire Wind Projects Through Swap Transaction with BP in U.S.
Equinor, a leading energy company, has announced a swap transaction with BP that will result in Equinor taking full ownership of the Empire Wind lease and projects. In return, BP will take full ownership of the Beacon Wind lease and projects in the United States.
Under the agreement, BP will acquire Equinor’s 50% stake in the Beacon Wind US offshore wind projects, which are situated in federal waters between Cape Cod, Massachusetts, and Long Island, New York. These projects, known as Beacon Wind 1 and 2, have the potential to deliver renewable energy to over 2 million consumers in the northeastern region of the country.
On the other hand, Equinor will gain ownership of BP’s 50% stake in the Empire Wind US offshore wind projects, located 15-30 miles southeast of Long Island.
Additionally, as part of the deal, BP will assume ownership of Equinor’s 50% interest in the Astoria Gateway for Renewable Energy (AGRE) site, while Equinor will take ownership of BP’s 50% interest in the South Brooklyn Marine Terminal (SBMT).
Previously, both BP and Equinor held equal stakes in the Beacon and Empire offshore wind projects. However, with this new agreement, the companies will independently develop their wholly owned projects.
BP expects the transaction to be cash neutral, with customary working capital adjustments. However, following a fair value assessment of BP’s assets, the company anticipates recognizing a pre-tax impairment charge of approximately $0.6 billion related to its US offshore wind assets in the fourth quarter of 2023. The completion of the transaction is expected around mid-2024.
Equinor estimates that the swap will result in a combined reported loss of approximately $200 million for the company.
This swap transaction signifies a strategic move for both Equinor and BP as they focus on advancing their individual offshore wind projects. By leveraging their expertise and resources independently, they are set to make significant contributions to the renewable energy sector in the United States.
As the global push for clean and sustainable energy sources continues, projects like Beacon Wind and Empire Wind play a crucial role in meeting the renewable energy demands of the future. With this swap transaction, Equinor and BP are aligning their priorities to drive the growth of the offshore wind industry and contribute to the transition to a low-carbon economy.
The agreement between Equinor and BP exemplifies the ongoing commitment of energy companies to embracing renewable energy sources and the vital role offshore wind will play in achieving climate goals. This transaction has the potential to accelerate the development of offshore wind projects in the United States and provide long-term benefits for communities and consumers seeking cleaner energy alternatives.
In conclusion, Equinor’s full ownership of the Empire Wind projects, acquired through the swap transaction with BP, marks a significant milestone in the renewable energy landscape. With a continued focus on offshore wind development, Equinor and BP are poised to make a lasting impact on the US energy sector and contribute to a more sustainable future.
