TotalEnergies exits US offshore wind concessions to reinvest in LNG

TotalEnergies is exiting its two offshore wind concessions in the United States. The French major signed agreements with the US Department of the Interior (DOI) to relinquish the Carolina Long Bay (OCS-A 0545) and New York Bight (OCS-A 0538) concessions, both awarded in 2022 alongside its partners. TotalEnergies argues that offshore wind development in the United States is costly and likely to negatively affect electricity prices for American consumers, unlike the situation observed in Europe. The group contends that other technologies can more economically address the growth in US electricity demand.

Recovered royalties to be reinvested in LNG

The agreements provide that TotalEnergies will recover the royalties paid to the DOI for both concessions and reinvest an equivalent amount in gas production and electricity exports in the United States. Patrick Pouyanné, chairman and chief executive of TotalEnergies, indicated that these funds will finance the construction of the Rio Grande LNG plant, with a capacity of 29 Mt, and expand hydrocarbon activities. According to Pouyanné, the investments are intended to supply Europe with liquefied natural gas (LNG) and provide gas for American data centers. TotalEnergies characterises this reallocation as a more optimal use of its capital in the country.

A letter of intent for Alaska LNG

In parallel, TotalEnergies signed a letter of intent with Glenfarne, the lead developer of the Alaska LNG project, for the long-term offtake of 2 million tonnes per year (Mtpa) of LNG over 20 years. The agreement remains subject to a final investment decision. The move reinforces the group's exposure to US gas exports, in line with its strategy across the full LNG value chain.