Equinor Starts Drilling for $9B Gas Development offshore Brazil

Development drilling has started at Raia in the Campos Basin offshore Brazil, a project that could account for 15 percent of demand in the South American country when the field starts production 2028, Equinor ASA said Tuesday.

"The project is Equinor's largest international investment to date, totaling around $9 billion", the Norwegian majority state-owned energy major said in an online statement.

Raia is designed to produce up to 16 million cubic meters (565.03 million cubic feet) of gas per day, Equinor said, noting Raia is "one of Brazil's most significant natural gas projects". The operator estimates total recoverable reserves to exceed 1 billion barrels of oil equivalent.

"While drilling takes place, integration and commissioning activities on the FPSO [floating production, storage and offloading vessel] are progressing well", said Geir Tungesvik, Equinor executive vice president for projects, drilling and procurement. Tokyo-based MODEC Inc is building FPSO Raia.

The drilling campaign, which has deployed the Valaris DS-17 drillship, comprises six wells. Raia sits in waters about 2,900 meters (9,514.44 feet) deep and around 200 kilometers (124.27 miles) away from shore, according to Equinor.

The gas will be carried by a 200-kilometer pipeline from the FPSO to the city of Macaé in Rio de Janeiro state, Equinor said.

Equinor operates Raia with a 35 percent stake. Repsol Sinopec Brasil owns 35 percent. State-owned  Petróleo Brasileiro SA holds 30 percent. The partners made the final investment decision 2023.

Integrated Power

In another Brazilian undertaking Equinor on Monday announced it has acquired the ready-to-build 230-megawatt Esquina do Vento onshore wind complex from Aarhus, Denmark-based Vestas Wind Systems A/S.

"The acquisition, conducted by Equinor’s fully owned subsidiary Rio Energy, supports Equinor's power strategy to build market-driven, multi-technology portfolios", Equinor said in a press release. "By combining renewable generation, operational capabilities and energy trading, these portfolios will further enhance value creation. The Esquina do Vento complex is expected to deliver double-digit project returns".

Installation of the project's 51 turbines in the state of Rio Grande do Norte is expected to be completed next year, said Vestas, which will supply the turbines, as well as operate and maintain the farm under a 30-year agreement. Equinor expects to start commercial operation 2028.

Esquina do Vento's capacity of 1 terawatt hours is enough to power about 520,000 homes in Brazil, the companies said.

"Brazil is a key market for Equinor's long-term growth", said Helge Haugane, Equinor executive vice president for power. "We have a solid and diversified portfolio of oil and natural gas in the country. With this acquisition, we are expanding in renewable energy and strengthening our integrated power portfolio, where wind, solar and trading work together to deliver competitive and reliable power".

Equinor said its onshore power output in Brazil would be traded by its trading arm Danske Commodities.

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