TotalEnergies exits U.S. offshore wind, reallocates capital to LNG and gas projects, citing high costs and better investment opportunities.
TotalEnergies has entered into formal settlement agreements with the United States Department of the Interior (DOI) to relinquish its offshore wind lease holdings in the United States. These include the Carolina Long Bay lease (OCS-A 0545) and the New York Bight lease (OCS-A 0538), both of which were originally awarded in 2022 as part of the country’s broader push to expand renewable energy capacity. With this decision, the company, along with its project partners, will fully exit offshore wind development activities in the U.S. market.
As part of the agreed settlement terms, TotalEnergies will recover the lease payments it had previously made for these offshore sites. Importantly, the company has committed to reinvesting an equivalent amount of capital into the expansion of its U.S. gas and power operations. This strategic redirection reflects a broader reassessment of investment priorities within the company’s global energy portfolio, particularly in light of regional cost dynamics and market conditions.
According to TotalEnergies, detailed studies conducted on the two offshore wind lease areas revealed that project development costs in the United States are significantly higher compared to similar projects in Europe. These elevated costs, the company noted, could ultimately translate into higher electricity prices for consumers, thereby raising concerns about affordability. In contrast, the company believes that alternative energy sources and technologies—particularly natural gas—offer more cost-effective solutions to meet the rapidly growing electricity demand in the U.S., especially with the expansion of energy-intensive sectors such as data centers.
Patrick Pouyanné, Chairman and Chief Executive Officer of TotalEnergies, stated that the agreements with the DOI align with current U.S. energy policy directions. He emphasized that withdrawing from offshore wind projects was a pragmatic decision, given the economic realities of the U.S. market. In exchange for relinquishing the leases, the reimbursement of fees provides an opportunity for the company to deploy capital more efficiently in areas with stronger returns and strategic importance.
A key focus of this reinvestment will be the development of the 29 million tonnes per annum Rio Grande LNG project, which is expected to play a significant role in boosting U.S. liquefied natural gas production and export capacity. Additionally, TotalEnergies plans to expand its oil and gas operations within the country. These investments are positioned to support both domestic energy needs and international demand, particularly from Europe, which continues to seek diversified and reliable LNG supplies.
The company also highlighted that increased LNG production in the U.S. will contribute to meeting the energy requirements of fast-growing industries, including digital infrastructure such as data centers. By channeling funds into these sectors, TotalEnergies believes it can achieve a better balance between profitability, energy security, and market demand.
In a related development, TotalEnergies has signed a Letter of Intent with Glenfarne, the lead developer of the Alaska LNG project. The agreement outlines plans for the long-term purchase of 2 million tonnes per annum of LNG over a 20-year period, contingent upon the project reaching a final investment decision. This move further underscores the company’s commitment to strengthening its position in the global LNG market while supporting U.S.-based energy infrastructure projects.
