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Equinor (EQNR) Receives Australian Offshore Wind Study License

Equinor ASA EQNR, the leading Norwegian energy company, and Oceanex Energy have received a license from the Australian government to evaluate the feasibility of constructing a wind farm off the country’s east coast. The government granted the license in a bid to expand its portfolio of clean energy initiatives.

If the construction seems feasible post evaluation, Oceanex, along with Equinor, can apply for a commercial license to build an offshore wind project. The feasibility license enables the developers to conduct environmental assessments and geotechnical surveys related to the project.

Per the energy minister of Australia, the Novocastrian Wind project, situated more than 12.4 miles offshore Newcastle, in New South Wales, has the potential to generate over 2 gigawatts (GW) of electricity, which is sufficient to power approximately 1.2 million households.

Australia is poised to become a significant market for offshore wind farms following the establishment of a legal framework for offshore wind development in November 2021. Offshore wind farms are known for their larger size and higher productivity compared to their onshore counterparts.

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The Australian government’s decision to grant the license came a day after the opposition Coalition suggested the construction of seven nuclear plants by 2050. The plan was strongly criticized by the prime minister, as the country strictly prohibits the use of nuclear power. Instead, the current government is focused on phasing out coal-fired power and expanding renewable energy projects to achieve its net zero emission goal by 2050.

Australia is currently targeting to derive 82% of its power supply from renewable sources that currently stands at around 40%. In a bid to boost its renewables portfolio, the government has decided to underwrite A$40 billion to support new wind, solar and battery projects. Further, in the past month, the government approved six projects to assess the feasibility of constructing wind farms off Victoria's coast, including proposals from wind energy companies like Orsted and Iberdrola.

Zacks Rank and Key Picks

Currently, EQNR carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, SM Energy SM and Hess Midstream Partners LP HESM. Archrock presently sports a Zacks Rank #1 (Strong Buy), while SM Energy and Hess Midstream carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.

Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.

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SM Energy Company (SM) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Hess Midstream Partners LP (HESM) : Free Stock Analysis Report

Equinor ASA (EQNR) : Free Stock Analysis Report

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