Norwegian oil major Equinor and SSE have closed a deal to sell a combined 20% in the world’s biggest offshore wind project, the 2.4GW Dogger Bank A and B phases off the UK, to Italian oil firm Eni.
Eni will pay Equinor and SSE each about £202.5m ($272m) for their 10% stakes in the first two phase of the giant wind project off northern England once the transaction closes, bringing the total value of the deal to £405m. Equinor and Eni had recently taken a financial investment decision on Dogger Bank A and Dogger Bank B.
“This is our third offshore wind transaction in less than two years. Once again, we have demonstrated Equinor’s ability to create value from renewables projects,” said Pål Eitrheim, executive vice president in New Energy Solutions at Equinor.
“The divestment is in line with our strategy. We access attractive acreage early and at scale, then leverage our technology and experience to mature and de-risk projects.”
The transaction is expected to close in early 2021, subject to regulatory and lenders approvals and customary purchase price adjustments. After the deal is closed, Equinor and SSE will each hold 40% in Dogger Bank A & B, and Eni 20%.
Eni entering northern seas
“For Eni, entering the offshore wind market in Northern Europe is a great opportunity to gain further skills in the sector thanks to the collaboration with two of the industry’s leading companies, and to make a substantial contribution to the 2025 target of 5GW of installed capacity from renewables, an intermediate step towards the more ambitious target of zero net direct and indirect greenhouse gas emissions in Europe by 2050,” Eni chief executive Claudio Descalzi said.
The transaction doesn’t affect the 1.2GW Dogger Bank C third phase of the giant project, in which Equinor and SE each still have a 50% stake.
Equinor and SSE had secured 3.6GW in offshore wind contracts for all three phases of Dogger Bank in the UK government’s contract for difference (CfD) auction last year. SSE Renewables is leading the construction of the full 3.6GW project, while Equinor will be its operator.
Dogger Bank A-C will generate around 5% of the UK demand for renewable electricity and supply energy to about 6m British families, Eni said.
The construction of the Dogger Bank A and B is expected to cost a total of £6bn and will take place in two stages, with the first to be completed by 2023, and the second by 2024.
The project will feature the 13MW version of GE's flagship Haliade-X machine, currently the largest wind turbine on the planet.
Eni, a latecomer to offshore wind, is speeding up its own energy transition.
The Italian company has targeted to boost its installed renewable energy capacity to 25GW by 2035, and to 55GW by 2050.
The company is also part of the Northern Endurance Partnership (NEP) together with BP, Equinor, National Grid, Shell and Total that aims to develop an offshore CO2 transport and storage infrastructure to decarbonise industrial clusters in north-eastern England.
UPDATED to clarify that Eni is slated to pay £202.5m ($272m) to each Equinor and SSE