BP and Equinor will restructure ownership of their joint US offshore wind projects, the 1230MW Beacon Wind 1 and 1360MW Beacon Wind 2 and 816MW Empire Wind 1 and 1260MW Empire Wind 2.
The deal will see BP take ownership the Beacon Wind projects by taking Equinor’s 50% stake in them, and Equinor will receive BP’s 50% stake in the Empire Wind development.
In addition, BP has agreed to take ownership of Equinor’s 50% interest in the Astoria Gateway for Renewable Energy site and, subject to certain future conditions, Equinor will to take ownership of BP’s 50% interest in the South Brooklyn Marine Terminal.
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 to terminate the Offshore Wind Renewable Energy Certificate Purchase and Sale Agreement for the Beacon Wind 1 project.
The deal aims to help each company optimise their development strategies, strengthen their positions in the US offshore wind market and continue supporting the energy transition.
The proposed transaction is expected to be on a cash neutral basis subject to customary working capital adjustments. Following assessment of fair value of BP’s assets, the company expects to recognise a pre-tax impairment charge of around $0.6bn relating to its US offshore wind assets in the fourth quarter 2023.
BP said it remains committed to US offshore wind and will continue to seek opportunities to build on its global portfolio.
Subject to regulatory approvals, the transaction is currently anticipated to close 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 BP’s executive vice president for gas and low carbon energy Anja-Isabel Dotzenrath.
“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.”