Equinor Buys $940m Stake in Gas-Fired Power Plant

Norwegian energy group ‌Equinor said on Monday it has agreed to buy a stake in a gas-fired power plant in the U.S. state of Pennsylvania, seeking to benefit from rapidly growing electricity demand from data centres and other industry.

Equinor will pay $940 million, subject to final adjustment, for 87.71% of the Class A shares from BlackRock's Global Infrastructure Partners in the Lackawanna Energy Center, a 1,483 megawatts (MW) gas-fired combined cycle power plant, it said.

The remaining Class A shares and 100% of the Class B shares are held by Invenergy, North America's largest privately held independent power producer, which continues to manage and operate Lackawanna.

"Now we get a significant foothold in one of the world's most attractive markets," Helge Haugane, executive vice president for power at Equinor, told Reuters.

Lackawanna is among the largest and most efficient gas-fired plants in the PJM power market, which serves nearly 70 million consumers across 13 states and is expected to see continued demand growth, the Norwegian company said.

Equinor already owns significant stakes in onshore gas production in PJM, in the Appalachian Basin, and trades power there via its Danske Commodities subsidiary, Haugane said.

In addition, the company is investing in battery storage there, and adding gas-fired generation creates a better, more robust portfolio, which may also offer new opportunities in future, he added.

The investment comes at a time when Equinor is reining back spending on renewables and faces legal challenges from the administration of U.S. President Donald Trump against its Empire Wind offshore wind farm.

While Trump has made deals with other offshore wind developers, getting them to invest in fossil fuel projects instead, there was no such motivation for Equinor, given its already large natural gas presence in the U.S., Haugane said.

(Reuters)