Total SA struck a deal on June 3 to enter Scotland’s largest offshore wind farm project, which according to CEO Patrick Pouyanné provides a major boost to its low-carbon strategy.
The French energy giant will acquire a 51% stake in the Seagreen 1 offshore wind farm project, located off the coast of Scotland in the U.K. North Sea. Total agreed to make an upfront payment to SSE Renewables at closing of 70 million pounds (US$88 million) for the acquisition. The agreement also includes earn-outs of up to 60 million pounds in aggregate, subject to performance conditions.
Total said the Seagreen 1 project represents a global investment of around $3.7 billion. The company has secured close to 70% of external financing for its 51% stake, according to its release.
“Total builds up a strong position in the world’s largest offshore wind market, as it becomes a majority stakeholder in the Seagreen 1 project, one of the largest offshore wind farms in the U.K. North Sea,” Pouyanné said in a statement on June 3. “This move represents a major change of scale for Total’s offshore wind activity in line with our strategy of profitable growth in renewables and low carbon electricity.”
Seagreen 1 has secured all necessary major permits and onshore construction began in first-quarter 2020. Designed to cover the energy needs of around 1 million homes, the 1,140 megawatts (MW) project will start producing renewable electricity at year-end 2022. Once completed, it will be Scotland’s largest offshore wind farm.
The purchase agreement between Total and SSE also covers a potential extension opportunity of up to 360 MW.
Total is targeting 25 gigawatts of a renewable generation capacity in 2025 as part of its strategy to build a portfolio of activities in low-carbon electricity.
The Seagreen 1 transaction remains subject to conditions precedent, including public authorities approval and should be finalized by July, the company said.
SSE Renewables was advised by Jefferies International Ltd. and Linklaters LLP on the transaction.
Recommended Reading
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.
Equinor Acquires Stake in Standard Lithium Smackover Projects
2024-05-08 - Equinor’s transaction, completed effective May 7, includes interests in Standard Lithium’s flagship South West Arkansas Project and East Texas properties.
Crescent Point Divests Non-core Saskatchewan Assets to Saturn Oil & Gas
2024-05-07 - Crescent Point Energy is divesting non-core assets to boost its portfolio for long-term sustainability and repay debt.