Equinor to Power Gullfaks and Snorre Fields With Wind Energy

Equinor ASA EQNR along with partners is planning to supply power from floating offshore wind projects to the Gullfaks and Snorre fields.

Per an analysis by Equinor, the Snorre and Gulfaks fields in the Tampen area in the northern North sea are best suited for this initiative. The study was made to ascertain which oil and gas installations on the NCS are appropriate for power supply from a floating offshore wind farm.

Further, evaluation is required to be carried out related to a wind farm solution, which willcomprise11 wind turbines based on Equinor’s floating offshore wind concept, Hywind. The 8 megawatt turbines will have a total capacity of 88 megawatt. The turbines are projected to meet about 35% of the annual power demand of the Snorre A and Bas well as Gullfaks A, B and C platforms. When the wind speed is higher the percentage will increase considerably. The partners of the fields will progress with the project and an investment decision is likely to be taken in 2019.

The partners in the Gullfaks license include Equinor, Petoro and OMV (Norge) AS. The partners in the Snorre license comprise Equinor, Petoro AS, Exxon Mobil Corporation XOM, Idemitsu Petroleum Norge AS, DEA Norge AS and Point Resources AS.

Project Benefits

The Hywind Tampen project is estimated to lower CO2 emissions by more than 200,000 tons per year, which corresponds to emissions from 100,000 cars as well as reduce the use of gas turbines. The project, which is likely to be the first offshore wind farm, is directly linked to oil and gas platforms as well as pave way for new industrial prospects for Norway. Other benefits from this project include further development of floating offshore wind technology, cost cuts and creation of more competitive solutions. From 2020 to 2030, the Tampen project will lower CO2 emissions on the Norwegian continental shelf by 2.5 million tons per year.

Project Financing

The partners have estimated the initial capital and development expenditures of the project at about NOK 5 billion ($602.2 million) along with further cost cuts. The industry’s NOx fund is likely to provide about NOK 566 million as investment support for the project.

Moreover, Norwegian authority has opened avenues aid innovative offshore wind projects related to the oil and gas industry through offshore wind strategy and Enova.

Owned by the Ministry of Climate and Environment, Enova contributes in lowering greenhouse gas emissions, development of energy and climate technology along with strengthening the supply system.

Price Performance

In the past year, Equinor’s shares have surged 40.7% compared with the industry’s 27.3% rise.

Zacks Rank & Stocks to Consider

Equinor currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Petroleo Brasileiro S.A. PBR, or Petrobras SA and Helix Energy Solutions Group, Inc HLX. These stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.

Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.

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