Equinor Expands US Power Exposure With $940M Lackawanna Deal

Lackawanna's Operating Profile Adds Scale

Lackawanna is a gas-fired combined-cycle plant with 1,483 megawatts of capacity and annual net electricity generation of nearly 9 terawatt-hours. The facility consists of three combined-cycle units, each comprising a gas turbine, steam turbine, generator and heat recovery system.

The plant began commercial operations in January 2019, giving Equinor exposure to an established operating asset rather than a project still under construction. Lackawanna has an average heat rate of 6,375 British thermal unit per kilowatt-hour, highlighting its operating profile in the PJM market.

Deal Structure Supports Cash Flow Visibility

The transaction gives Equinor access to an operating asset that can begin contributing cash flow immediately, while investor-protection mechanisms enhance visibility into longer-term returns. Acquiring an existing facility reduces construction and commissioning risks that typically accompany new power projects.

Invenergy’s continued role as manager and operator further lowers execution risk, allowing Equinor to participate in the PJM market through an established platform.

Appalachian Gas Creates Strategic Fit

Lackawanna is located close to Equinor’s Appalachian Basin position, which has daily production capacity of more than 1.7 billion cubic feet of natural gas. The proximity creates a strategic link between EQNR’s existing gas portfolio and a large gas-fired power asset.

Rising electricity demand from data centers, industrial activity and broader electrification in PJM could strengthen the long-term value of Equinor’s gas-to-power platform.

Growth Potential Comes With Execution Risks

The transaction is expected to pave the way for deeper collaboration with Invenergy, giving Equinor opportunities to expand its presence in the PJM market over time. However, the $940 million investment still carries risks tied to regulatory approvals, power-price volatility and EQNR’s non-operating role in Lackawanna.

While the acquisition is likely to improve diversification and add a more visible source of cash flow for Equinor, future returns will depend on market conditions and effective execution. For EQNR, the deal represents a targeted expansion into power generation that complements the company’s existing U.S. gas portfolio rather than signaling a broad shift away from hydrocarbons.

EQNR’s Zacks Rank & Key Picks

Equinor currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the energy sector are Valero Energy Corporation VLO, Cactus, Inc. WHD and HF Sinclair Corporation DINO. Valero and HF Sinclair currently sport a Zacks Rank #1 (Strong Buy) each, while Cactus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Valero operates 14 global refineries with a daily refinery throughput capacity of 3 million barrels. The refiner’s ethanol operations are spread across 12 U.S. ethanol plants. During the second quarter of 2026, VLO recorded strong gains in its ethanol sector. Margins expanded to $1.15 per gallon from 52 cents per gallon and operating income rose to 75 cents per gallon compared with 13 cents per gallon a year earlier.

Cactus designs, manufactures and services highly engineered wellhead, pressure-control and spoolable pipe technologies used in oil and natural gas drilling, completion and production operations. The company operates primarily through its pressure control and spoolable technologies businesses, serving customers across major U.S. shale basins and select international markets. WHD in its latest earnings call expects Spoolable Technologies revenues to rise another 15%-20% sequentially in the third quarter, supported by Latin American orders and higher domestic activity. WHD ended June with $365.8 million in cash and no bank debt, giving it financial flexibility to support capacity expansion and continued international growth.

HF Sinclair is an independent refiner producing gasoline, diesel, jet fuel, renewable diesel, lubricants and specialty products. In second-quarter 2026, DINO’s adjusted EBITDA increased to $1.5 billion from $665 million a year earlier, driven by stronger refining margins, higher volumes and solid execution. Meanwhile, the company’s renewable fuels adjusted EBITDA rose to $123 million against a $2 million loss reported a year ago due to increased renewable identification number prices, improved Producer’s Tax Credit benefits and higher volumes.

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