TotalEnergies exits US offshore wind market
TotalEnergies says that it has signed settlement agreements with the US Department of the Interior (DOI) to relinquish its Carolina Long Bay lease (Lease OCS-A 0545) and its New York Bight lease (Lease OCS-A 0538), both awarded in 2022, along with its partners.
As a result, TotalEnergies will no longer develop offshore wind projects in the US.
Under the terms of the settlement, TotalEnergies will recover the lease fees paid and will invest an equal amount in the development of gas and power production in the US, and LNG exports from the US.
TotalEnergies says that its studies on these leases have shown that offshore wind developments in the US, unlike those in Europe, are costly and might have a negative impact on power affordability for US consumers.
Since other technologies are available to meet the growing demand for electricity in the US in a more affordable way, TotalEnergies says that there is no need to allocate capital to this technology in the US.
Patrick Pouyanné, Chairman of the Board of Directors and Chief Executive Officer of TotalEnergies, said: “TotalEnergies is pleased to sign these settlement agreements with the DOI and to support the administration’s energy policy. Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees.”
Pouyanné continued: “Furthermore, these agreements, under which we will reinvest the refunded lease fees to finance the construction of the 29 Mt Rio Grande LNG plant and the development of our oil and gas activities, allows us to support the development of US gas production and export. These investments will contribute to supplying Europe with much-needed LNG from the US and provide gas for US data center development. We believe this is a more efficient use of capital in the United States.”
TotalEnergies has also signed recently a Letter of Intent with Glenfarne, lead developer of the Alaska LNG project, for the long-term offtake of 2 million tons per year (Mtpa) of LNG over 20 years, subject to the project’s final investment decision.
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Bruce Beaubouef
Managing Editor
Bruce Beaubouef is Managing Editor for Offshore magazine. In that capacity, he plans and oversees content for the magazine; writes features on technologies and trends for the magazine; writes news updates for the website; creates and moderates topical webinars; and creates videos that focus on offshore oil and gas and renewable energies. Beaubouef has been in the oil and gas trade media for 25 years, starting out as Editor of Hart’s Pipeline Digest in 1998. From there, he went on to serve as Associate Editor for Pipe Line and Gas Industry for Gulf Publishing for four years before rejoining Hart Publications as Editor of PipeLine and Gas Technology in 2003. He joined Offshore magazine as Managing Editor in 2010, at that time owned by PennWell Corp. Beaubouef earned his Ph.D. at the University of Houston in 1997, and his dissertation was published in book form by Texas A&M University Press in September 2007 as The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005.