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Equinor (EQNR) to Buy Triton Power as Part of Low-Carbon Plan

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Equinor ASA EQNR collaborated with SSE Thermal to acquire power generating company Triton Power for £341 million.

The move is part of the initiative taken by European energy companies to clean up their operations and transit to renewable energy.

The acquisition involves three U.K. electricity facilities, which will be used to develop low-carbon projects to drive the net-zero transition. The Saltend power station is the main facility acquired with Triton Power, with an installed capacity of 1.2 gigawatts (GW).

The Saltend power station is a typical natural gas-powered combined gas turbine plant in Yorkshire. Equinor and SSE Thermal intend to develop the facility to operate on up to 30% hydrogen from 2027. The companies plan to have the facility operating on 100% hydrogen in the future, which can be derived from Equinor’s Hydrogen to Humber (H2H) Saltend decarbonization project.

Triton Power is part of Equinor’s H2H Saltend decarbonization project. The project involves the construction of a blue hydrogen plant in northeast England, which has a hydrogen production capacity of 0.6 GW.

Upon the deal closure, Equinor and SSE Thermal will own and operate Triton Power with equal opportunities. The companies are already developing hydrogen power plants, hydrogen storage and conventional combined gas turbine with carbon-capture facilities in Keadby and Peterhead in Scotland.

The latest acquisition reflects Equinor’s dedication to developing a strong energy partnership with the U.K.  The flexibility of the power system is crucial as the demand for clean energy is expected to significantly grow over the coming years. The companies will explore ways to decarbonize Saltend and create opportunities at other assets to play a continued role in a net-zero future.

Price Performance

Shares of Equinor have outperformed the industry in the past six months. The stock has gained 34.4% compared with the industry’s 29% growth.


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Zacks Investment Research

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Zacks Rank & Stocks to Consider

Equinor currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Matador Resources Company MTDR is among the leading oil and gas explorer in unconventional resources in the United States. MTDR has hedging deals for 2022 oil and gas production in place, which will help it to navigate through any weak price environment.

Matador has a strong focus on returning capital to shareholders. MTDR recently announced a quarterly cash dividend of 10 cents per share, which doubled from the cash dividend of 5 cents initiated last year.

Range Resources Corporation RRC is among the top 10 natural gas producers in the United States. The upstream energy firm expects the free cash flow to exceed $1.4 billion this year, which could be the highest among Appalachian players.

Range Resources has reinstated its regular quarterly cash dividend, expected to start in the second half of this year. The company anticipated its annual dividend rate at 32 cents per share. RRC’s board of directors approved the authorization of a $500-million share repurchase program, which is likely to be funded with the company’s free cash flow generation.

Phillips 66 PSX is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. Precisely, it has an oil and gas pipeline network of 22,000 miles, which is expected to increase in the coming days.

Phillips 66 has hiked its quarterly dividend to 97 cents per share, representing an increase of 5% from the prior quarter. With the recent resumption of the stock repurchase program, the increment in the quarterly dividend represents Phillips 66’s strong focus on returning capital to stockholders. Since the company’s inception in 2012, this has resulted in its 11th annual dividend hike.

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