Equinor (EQNR) has announced a swap transaction with bp. Under the terms of this arrangement, Equinor will assume total ownership of the Empire Wind lease and corresponding projects, while bp will take over the Beacon Wind lease and its projects in the U.S.
As part of this transaction, bp is set to acquire Equinor's 50% interest in the Beacon Wind US offshore wind ventures, which are situated in federal waters between Cape Cod, Massachusetts, and Long Island, New York. The combined capacity of Beacon Wind 1 and 2 is estimated to supply renewable energy to more than 2 million consumers in the northeastern US.
In a reciprocal move, Equinor will take over bp's 50% interest in the Empire Wind US offshore wind ventures, located 15-30 miles southeast of Long Island.
Simultaneously, bp will acquire Equinor's 50% stake in the Astoria Gateway for Renewable Energy (AGRE) site and Equinor will take over bp's 50% stake in the South Brooklyn Marine Terminal (SBMT).
Prior to this transaction, both bp and Equinor held a 50% stake in both Beacon and Empire offshore wind projects. As per the new agreement, both companies will independently handle the development of their wholly-owned projects.
Bp estimates that the proposed transaction will balance out the cash flow, subject to the customary working capital adjustments. After ascertaining fair asset value, bp anticipates recognizing a pre-tax impairment charge of approximately $0.6 billion in relation to bp's US offshore wind assets in Q4 2023. Completion of the transaction is currently expected around mid-2024.
From Equinor's perspective, they anticipate that the transaction will result in a combined reported loss of approximately $200 million.
