BP PLC has agreed to divest its onshore wind business in the United States to LS Power Development LLC, toward a goal of $3-4 billion in asset sales this year.
The sale of BP Wind Energy North America Inc. to New York City-based LS Power consists of 1.3 gigawatts (GW) net capacity from 10 projects in operation.
Five of the projects are wholly owned by BP: the 44-megawatt (MW) Flat Ridge I and 470-MW Flat Ridge II in Kansas, the 288-MW Fowler Ridge I and 99-MW Fowler Ridge III in Indiana, and the 25-MW Titan in South Dakota.
In each of the other five, BP owns 50 percent: the 21-MW Auwahi in Hawaii, the 248-MW Cedar Creek II in Colorado, the 200-MW Fowler Ridge II in Indiana, the 125-MW Goshen II in Idaho and the 141-MW Mehoopany in Pennsylvania.
All 10 projects, which can generate up to 1.7 GW gross, are grid-connected and signed to 15 offtakers, according to a joint statement Friday.
To be managed under LS Power’s portfolio company Clearlight Energy, the projects would grow the purchaser’s operating fleet to about 4.3 GW, the statement said.
“LS Power will add bp’s US onshore wind business to an existing fleet of renewable, energy storage, flexible gas and renewable fuels assets, which comprise a 21GW operating portfolio and more than 780 miles of high-voltage transmission lines in operation as well as another 350+ miles currently under construction or development”, it said.
The parties expect to complete the transaction by year-end, subject to regulatory approvals. The price was not disclosed. Employees will transfer to the new owner.
LS Power chief executive Paul Segal said, “We are focused on a holistic approach to advancing American energy infrastructure that includes improving existing energy assets while investing in transformative strategies that make energy more efficient, affordable and available”.
“Well-located with well-structured contracts, these new assets will expand our renewable energy presence and help to meet growing energy demand across the US”, Segal added.
William Lin, BP executive vice president for gas and low-carbon energy, said, “We have been clear that while low carbon energy has a role to play in a simpler, more focused bp, we will continue to rationalize and optimize our portfolio to generate value”.
BP expects to achieve $3-4 billion of a target of $20 billion in divestment proceeds by 2027, part of a “reset” strategy that involves scaling down renewables investment and cutting costs. BP signed or completed $1.5 billion of divestments in the first quarter, according to the company.
Last week BP said it had signed a deal to sell its convenience, mobility and BP Pulse businesses in the Netherlands to local fuels distributor Catom BV.
To contact the author, email jov.onsat@rigzone.com
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