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bp and Equinor have reached an agreement to restructure their joint US offshore wind projects. bp will take over Equinor’s stake in Beacon Wind 1 and 2, while Equinor will take over bp’s stake in Empire Wind 1 and 2. Additionally, bp will acquire Equinor’s interest in the Astoria Gateway for Renewable Energy (AGRE) site, and Equinor will potentially take over bp’s interest in the South Brooklyn Marine Terminal (SBMT), subject to certain conditions.
In the past, bp and Equinor jointly owned 50% of the Beacon and Empire offshore wind projects. Now, they’ll independently develop their own projects. They’ve also ended the Offshore Wind Renewable Energy Certificate (OREC) Purchase and Sale Agreement for the Beacon Wind 1 project with the New York State Energy Research and Development Authority (NYSERDA). This move allows both companies to enhance their development strategies, bolster their presence in the US offshore wind market, and further contribute to the energy transition.
Beacon Wind 1 and 2 span 128,000 acres in federal waters from Cape Cod, Massachusetts, to Long Island, New York. With a total potential generating capacity exceeding 2.5 gigawatts, these projects could power over 2 million consumers in the northeastern US with renewable energy.
The transaction is projected to be cash neutral, with customary working capital adjustments. Following an evaluation of asset fair value, bp foresees recognizing a pre-tax impairment charge of approximately $0.6 billion related to its US offshore wind assets in Q4 2023. Despite this, bp reaffirms its dedication to US offshore wind and aims to expand its global portfolio. Pending regulatory approvals, the transaction is expected to conclude around mid-2024.
“Over the past few years, we have built a highly experienced offshore wind team with deep capabilities and a sizeable global project portfolio with scale positions in the most attractive basins,” said Anja Isabel Dotzenrath, bp executive vice president, gas & low carbon energy. “We remain disciplined with an uncompromised focus on value creation across our entire offshore wind portfolio as we continue to pursue growth opportunities that underpin our company’s transformation.”
“Beacon Wind 1 and 2 have immense potential to create American jobs, benefit local communities, deliver low carbon energy and support the energy transition,” noted Joshua Weinstein, bp’s president of offshore wind Americas. “bp has a proven track record of delivering complex engineering projects offshore, and we’ll continue bringing that expertise to bear as we advance the development, engage with communities and bring these projects closer to commercial operations.”
