One month after launching its energy transition strategy, energy giant bp has made its first foray into the offshore wind market, with the announcement of a new partnership with Norway-based energy company Equinor, including a $1.1 billion deal to acquire a 50% stake in a major project.
The new strategic partnership will focus on developing offshore wind projects in the US, including the development of existing offshore wind leases on the US East coast and the joint pursuit of further offshore wind opportunities. Additionally, bp has agreed to pay Equinor $1.1 billion for a 50% interest in both the Empire Wind and Beacon Wind assets.
The Empire Wind lease area is 15-30 miles southeast of Long Island and has a total area of 80,000 acres, and was awarded to Equinor in 2016. The area has a potential generation capacity of 2GW with a generating capacity of more than one million homes. Beacon Wind covers a total area of 128,000 acres of federal waters off New England’s coast, and is expected to have a total generating capacity of 2.4GW, sufficient to provide power to more than a million households in the Northeast US.
Equinor will remain the operator of the Empire and Beacon projects in the development, construction and operations phases, with the deputy project director for Empire Wind to be selected by bp. Over time the companies anticipate that the wind assets will be equally staffed by bp and Equinor.
Bernard Looney, bp’s CEO, said:
“This is an important early step in the delivery of our new strategy and our pivot to truly becoming an integrated energy company. Offshore wind is growing at around 20% a year globally and is recognized as being a core part of meeting the world’s need to limit emissions. Equinor is a recognized sector leader and this partnership builds on a long history between our two companies. It will play a vital role in allowing us to deliver our aim of rapidly scaling up our renewable energy capacity, and in doing so help deliver the energy the world wants and needs.”
Equinor CEO Eldar Sætre said:
“We look forward to working with BP who share our strong ambition to grow in renewable energy. Our partnership underlines both companies’ strong commitment to accelerate the energy transition and combining our strengths will enable us to grow a profitable offshore wind business together in the US.”