BP and Equinor have closed the transaction for BP’s acquisition of a 50 per cent interest in the Empire Wind and Beacon Wind projects off the U.S. east coast.
The closing of the transaction marks BP’s official entry into offshore wind.
“We see significant opportunities by rapidly growing bp’s offshore wind business, making a major contribution to our strategic goals and developing assets that will provide long-term, stable returns”, said Dev Sanyal, BP’s executive vice president of gas and low carbon energy.
The British oil & gas giant has bought the stakes in the two projects for a total cash consideration of around USD 1.1 billion, excluding customary purchase price adjustments.
Equinor and BP announced in September 2020 that BP was buying 50 per cent non-operated interests in Empire Wind and Beacon Wind and that they were establishing a strategic partnership, which would see the two companies together pursuing further growth in the U.S. offshore wind market.
“This transaction is the first step in the strategic partnership in offshore wind where Equinor and bp are combining strengths to enable profitable growth in offshore wind in the US. Equinor will remain the operator of the projects in these leases through the development, construction and operations phases, and the wind farms will be equally staffed in operations”, Equinor said.
On 13 January, the New York State Energy Research and Development Authority (NYSERDA) selected the partnership between Equinor and BP as the winner of the state’s second offshore wind solicitation. Under the award, the companies will develop the 1,260 MW Empire Wind 2 and the 1,230 MW Beacon Wind 1 offshore wind projects and will also partner with the State of New York to transform the South Brooklyn Marine Terminal (SBMT) and the Port of Albany into large-scale offshore wind working industrial facilities.
The execution of the procurement award is subject to the negotiation of a purchase and sale agreement between the Equinor-BP partnership and NYSERDA.
The Empire Wind lease area off Long Island has a total area of 80,000 acres. Its two phases of development have a potential generation capacity of 2 GW. The Beacon Wind lease area covers a total area of 128,000 acres off Nantucket and and Montauk Point. When fully developed, its two phases are expected to have a total generating capacity of 2.4 GW.
BP said that the completion of the transaction and the formation of the strategic partnership with Equinor was an important part of delivering its strategy and plans to become an integrated energy company.
The oil major announced its plans to become a net-zero company by 2050 (or sooner) at the beginning of 2020.
BP aims to grow its net renewable generating capacity from 2.5 GW in 2019 to 20 GW by 2025, and to around 50 GW by 2030. The oil & gas giant also aims to increase annual low carbon investment ten-fold by 2030 to around USD 5 billion a year.