BP Signs $1.1 Billion Offshore Wind Deal with Equinor

BP is paying $1.1 billion for a half-interest in two wind-energy assets offshore the U.S. East Coast. The seller is Norway's Equinor.
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BP (BP) - Get Report plans to buy a 50% stake in Equinor's  (EQNR) - Get Report Empire Wind and Beacon Wind assets for $1.1 billion. 

The U.K. oil giant will get a half interest in Empire Wind, located offshore New York state, and Beacon Wind, off the Massachusetts coast. 

The move marks BP's first move into offshore wind energy. The energy producer is looking to diversify into green-energy initiatives. 

BP shares "our strong ambition to grow in renewable energy," Equinor Chief Executive Eldar Saetre said in a statement.  

"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 U.S.” 

Empire Wind, located 15 to 30 miles southeast of New York's Long Island, has a total area of 80,000 acres and is expected to have an installed capacity of two gigawatts.

Beacon is located 20 miles south of Nantucket and covers 128,000 acres. That tract has a potential total capacity of more than 2.4 gigawatts. 

The power generation from each site will be enough to power 1 million homes. 

"Over the past decade Equinor has built world-class technical expertise in offshore wind," said Pal Eitrheim, the executive vice president for new energy solutions at the Stavanger, Norway, company. 

"This has enabled us to [access] high-grade wind acreage, resulting in a material, high-quality project pipeline."

Equinor will continue to operate the projects through development, construction and operating phases. The companies expect to eventually equally staff the projects.

The deal is effective Jan. 1. The companies expect to close the deal early next year, subject to conditions including regulatory clearances. 

American depositary receipts of both companies at last check were higher: BP by 0.6% to $20.44 and Equinor by 1.2% to $15.70.