Equinor is to acquire an 87.71% interest in the 1,483 MW Lackawanna Energy Center in Pennsylvania for $940 million, expanding its position in the US power market as electricity demand rises.
The gas-fired combined-cycle plant, which began commercial operation in 2019, is located in the PJM electricity market, serving around 70 million consumers across 13 states. The facility generates close to 9 TWh of electricity a year and has an average heat rate of 6,375 Btu/kWh.
The deal gives Equinor a sizeable operating power asset while complementing its gas production in the Appalachian Basin. That position supplies more than 1.7 billion cubic feet of gas a day to the north-eastern US, making Lackawanna a natural downstream link to the company’s existing energy business.
“Electricity demand in PJM is growing rapidly, driven by electrification, data centres and industrial activity,” said Helge Haugane, Equinor’s executive vice president for Power. He said the acquisition provides access to the country’s largest power market while offering “early cash flow and long-term value potential”.
Lackawanna comprises three combined-cycle units, each combining a gas turbine, steam turbine, generator and heat-recovery system. Invenergy, which developed the facility, will retain responsibility for its management and operation.
Equinor is buying the interest from funds managed by Global Infrastructure Partners, part of BlackRock. The remaining Class A shares and all Class B shares will remain with Invenergy AMPCI Thermal Power.
The transaction is structured to provide Equinor with preferential cash flow and protection mechanisms intended to give greater visibility over future returns. It is subject to customary regulatory approvals.
For Equinor, the acquisition also signals a broader approach to US electricity markets. Rather than building a power portfolio in isolation, the company is seeking opportunities where generation can be linked with its existing energy production and market presence.
The rapidly increasing electricity requirements of data centres, industrial facilities and wider electrification are making gas-fired generation an increasingly valuable flexible resource in PJM, while also creating opportunities for integrated energy companies with access to both fuel and power markets.
