Eni buys additional Dogger stake to bolster North Sea wind position

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A man wearing a face mask walks near the sign of Italian energy Eni company at a gas station in the Red Sea resort of Sharm el-Sheikh, south of Cairo, Egypt February 6, 2021. REUTERS/Amr Abdallah Dalsh/File Photo

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MILAN, Nov 2 (Reuters) - Italy's Eni (ENI.MI) has bought an additional stake in the Dogger Bank Wind Farm project to boost its position in the British offshore wind market as it builds up its green business.

The energy group on Tuesday bought a 20% stake in the Dogger Bank C project from Norway’s Equinor (EQNR.OL) and Britain’s SSE (SSE.L) for an equity value of around 140 million pounds ($191 million), the companies said.

In December Eni spent an overall 405 million pounds to buy a similar stake in the Dogger A and B projects from the same companies.

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"(This strengthens) our presence in the offshore wind market in Northern Europe, one of the most promising and stable markets in the world," Eni CEO Claudio Descalzi said in a statement.

Equinor said it was reducing the stake to cut the need for further investment and reduce risks while still holding a significant share.

"The divestment in the Dogger Bank C project is in line with our strategy of accessing selective markets early and at scale, leveraging our offshore capabilities to mature and de-risk projects," Equinor said.

Broker Jefferies said the price implied a valuation around 30% below the December deal, adding that could partly reflect differences in project timings and asset quality.

Equinor said Dogger Bank C had a different layout and was further from shore, meaning capital spending would be higher, as well as different taxation.

"These are the two main reasons behind the pricing, but we still see opportunities to optimize the project," the spokesman said.

When the deal is complete Equinor and SSE will own 40% of the overall Dogger Bank project while Eni will have 20%.

SSE said it would use the proceeds of the most recent stake sale to support the delivery of its net zero-orientated strategy.

The project off the northeast coast of England is expected to become the world’s largest offshore wind farm, helping the companies achieve their climate targets.

In total it will generate around 18 terrawat hours annually, enough renewable electricity to supply 5% of the UK’s demand, equivalent to powering six million UK homes.

Eni, which said the latest deal would add 240 megawatts of renewables to its portfolio, is looking to develop more than 6 gigawatts of green capacity by 2025.

Last month it said it planned to list part of its new retail and renewable business to help fund its energy transition plans with other spinoff plans in the pipeline. read more

($1 = 0.7333 pounds)

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Reporting by Stephen Jewkes in Milan, Terje Solsvik and Nerijus Adomaitis in Oslo; Editing by Kirsten Donovan and Louise Heavens

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