Equinor suspends offshore construction activities for Empire Wind project
In accordance with a halt work order issued by the U.S. government, Empire Offshore Wind will safely halt the offshore construction in waters of the outer continental shelf for the Empire Wind project. On 16 April, Empire received notice from the Bureau of Ocean Energy Management, ordering Empire to halt all activities on the outer continental shelf until BOEM has completed its review. Empire is engaging with relevant authorities to clarify this matter and is considering its legal remedies, including appealing the order. The federal lease for Empire Wind was signed with the US Administration in 2017. Empire Wind 1 has validly secured all necessary federal and state permits and is currently under construction. The project is being developed under contract with New York State Energy Research and Development Authority to provide an important new source of electricity for the State of New York. The construction phase has put more than 1,500 people to work in the US. Empire wind 1 has the potential to power 500,000 New York homes. Empire is complying with the order affecting project activities for Empire Wind. Upon receipt of the order, immediate steps were taken by Empire and its contractors to initiate suspension of relevant marine activities, ensuring the safety of workers and the environment. Empire Wind has per 31 March a gross book value of around $2.5B, including South Brooklyn Marine Terminal. Equinor's (EQNR) ownership to Empire is held through the Equinor Wind US. Total amount drawn under the project finance term loan facility per 31 March was around $1.5B. Empire is in the process of ascertaining the impact on the project and project financing. Equinor US Holdings has provided guarantees for the equity commitment in the project financing. In a full stop scenario, the $1.5B will be repaid from the equity commitment to the project finance lenders and Empire Offshore Wind will be exposed to termination fees towards its suppliers. The halt work order will be disclosed as a subsequent event in the first quarter 2025 report.
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