Equinor and BP Swap Ownership in New York Offshore Wind Projects

Equinor has agreed to a swap transaction with BP, resulting in a significant reshuffling of ownership for several offshore wind projects in New York State. The deal will see Equinor taking full control of the Empire Wind lease and projects, while BP will assume full ownership of the Beacon Wind lease and projects.

This transaction involves Equinor gaining 100% ownership of Empire Offshore Wind Holdings LLC and, subject to certain conditions, taking over BP’s half-share of the South Brooklyn Marine Terminal (SBMT) lease. Meanwhile, BP will take over Beacon Wind Holdings LLC and its associated project company, becoming the operator of the Beacon Wind projects.

The swap is expected to be cash neutral, barring standard settlements of cash and working capital items. This agreement allows both companies to focus on their respective corporate priorities. Equinor, with over 20 years of experience in offshore wind, has been active in the US offshore wind market since 2017. It has also built a strong portfolio with assets in the UK, Poland, Germany, and South Korea.

Following the agreement, a bid was submitted for the Empire Wind 1 project in New York’s fourth offshore wind solicitation round (NY4), which closed on Thursday. It has also been agreed upon to terminate the Offshore Wind Renewable Energy Certificate (OREC) Purchase and Sale Agreement with New York State for the Beacon Wind 1 project.

Upon the completion of the transaction, Equinor will take the Empire Wind projects forward with 100% ownership, and BP will do the same with the Beacon projects.

The transaction is, however, is subject to regulatory approval. The effective date is set for 1 January 2024, with closing expected in Q2 or Q3 2024.

“Building on our experience as a leading player in US offshore wind, we now take full ownership of a mature, large-scale offshore wind project in a key energy market, where we have built a strong local organization,” says Pål Eitrheim, executive vice president of Renewables in Equinor.

The 810 MW Empire Wind 1 project, already several years into development, will transform the South Brooklyn Marine Terminal into a hub for offshore wind, anchoring the East Coast offshore wind industry in New York City.

Molly Morris, senior vice president for Renewables in the Americas in Equinor, said that Empire Wind 1 is ready to deliver on New York’s climate and energy goals, with numerous permits and supplier contracts secured.

“Empire Wind 1 is ready and so is Equinor,” said Morris.

Earlier this month, Equinor and BP cancelled their OREC agreement for the second and larger (1,260 MW) phase of the Empire Wind project, known as Empire Wind 2, due industry-wide macroeconomic factors, such as inflation, interest rates, and supply chain disruptions.

Beacon Wind, located approximately 60 miles east of Montauk Point and 20 miles south of Nantucket, will provide generation capacity of 1,230 megawatts (MW).

Equinor said the transaction with BP is expected to result in a combined reported loss estimated to around USD 200 million for Equinor, assuming a positive outcome of the NY4 solicitation.

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