BP and Equinor recently announced an agreement to restructure the ownership of their joint US offshore wind projects which, following completion, will result in BP taking ownership of Equinor’s 50 per cent stake in the Beacon Wind 1 and 2 projects and Equinor taking ownership of BP’s 50 per cent stake in the Empire Wind 1 and 2 projects.
In addition, BP will take ownership of Equinor’s 50 per cent interest in the Astoria Gateway for Renewable Energy (AGRE) site and, subject to certain future conditions, Equinor will take ownership of BP’s 50 per cent interest in the South Brooklyn Marine Terminal (SBMT).
BP Gas and Low Carbon Energy Executive VP Anja Isabel Dotzenrath said: “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.”
Previously, BP and Equinor each held a 50 per cent stake in the Beacon and Empire offshore wind projects, but under the new agreement, the companies will work independently to develop their wholly-owned projects.
The pair have also agreed 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.
The agreement aims to help each company optimise their development strategies, strengthen its position in the US offshore wind market and continue supporting the energy transition.
“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 Dotzenrath.
Beacon Wind 1 and 2 comprise a combined area of 128,000 acres in US waters between Cape Cod, Massachusetts, and Long Island, New York.
The combined potential generative capacity of the projects is over approximately 2.5 gigawatts which has the potential to deliver renewable energy to over two million consumers in the northeastern US.
“Beacon Wind 1 and 2 have immense potential to create American jobs, benefit local communities, deliver low carbon energy and support the energy transition,” added BP Offshore Wind Americas President Joshua Weinstein.
The proposed transaction is expected to be cash-neutral and subject to customary working capital adjustments.
Following the assessment of the fair value of BP’s assets, the company expects to recognise a pre-tax impairment charge of around $0.6 billion relating to BP’s US offshore wind assets in the fourth quarter of 2023.
The transaction is subject to regulatory approvals and is anticipated to close around mid-2024.
