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Equinor's (EQNR) Dogger Bank Farm to Welcome Eni as Partner

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Equinor ASA (EQNR - Free Report) recently announced that the Italian energy major, Eni S.p.A. (E - Free Report) , has agreed to join the Dogger Bank Wind Farm project. Equinor and its joint venture partner in the project, SSE Renewables, have signed a deal to divest 10% each to Eni for £202.5 million (around $271.8 million) each. The deal is expected to close by early 2021.

The massive wind farm, located 60 miles off England’s North East coast, is expected to have a total capacity of 3.6 gigawatts (GW) upon completion. The overall project is divided into three phases of 1.2 GW each. The first two phases, Dogger Bank A and B, will likely be built simultaneously to capture synergies. Per the latest deal, Eni will receive the overall 20% stake in the first two phases, while Equinor and SSE Renewables will each hold 40%. The ownership for the third phase has remained unchanged with Equinor and SSE Renewables holding 50% interest each.

Onshore works for the wind farm project have commenced in early 2020. SSE Renewables is leading the construction works at the site, while Equinor is expected to head the operations. The massive project is expected to enable the companies to provide power to 6 million British homes. The investment amount for the first two phases is expected to be £6 billion (around $8 billion), as announced by Equinor toward November-end.

Notably, the overall project is touted to be the largest offshore wind farm in the world and expected to come online by 2026. It received financial support from the British government last year. In a crucial move, Equinor has also made power purchase deals with several clients for the wind farm. The project is expected to help the companies involved to reach their climate target. Equinor has plans to become a net-zero greenhouse gas emitter by 2050. Moreover, by 2035, it aims to boost the capacity of renewable projects to 12-16 GW.

Price Performance

Equinor’s stock has increased 3.9% in the past three months compared with the 10.8% rise for the industry.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Covanta Holding Corporation and Ameresco, Inc. (AMRC - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Covanta Holding’s bottom line for 2021 is expected to rise 95.3% year over year.

Ameresco’s bottom line for 2020 is expected to rise 21.7% year over year.

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