TotalEnergies has reached an agreement with the U.S. Department of the Interior that will see nearly $1 billion previously spent on offshore wind leases returned and redirected into gas and energy projects.
The settlement allows the energy giant to recover funds paid for offshore wind sites acquired in 2022, while committing to reinvest a similar amount into liquefied natural gas (LNG), power generation, and export infrastructure. As part of the deal, the company also agreed not to pursue new offshore wind developments in the United States for now.
The leases were originally secured during a major auction in the New York Bight area, where TotalEnergies spent hundreds of millions of dollars on projects planned for New York and New Jersey. Another lease was purchased off the coast of North Carolina. However, the company later concluded that offshore wind projects in the U.S. are significantly more expensive compared to similar developments in Europe.
Chief Executive Officer Patrick Pouyanné indicated that the agreement would not affect the company’s ongoing wind energy investments in Europe, where conditions remain more favorable.
A key part of the redirected investment will go into the Rio Grande LNG facility in Texas, operated by NextDecade. The project, located near Brownsville, is already under construction, with multiple processing units planned. TotalEnergies is among several investors backing the development.
Additional funding will support conventional oil and shale gas operations, as well as a potential partnership in the Alaska LNG project being developed by Glenfarne.
The company has also signed a preliminary agreement to purchase LNG from the project over a 20-year period, pending final approval.
TotalEnergies described the move as a better allocation of capital, especially given regulatory uncertainties surrounding offshore wind in the U.S.
The company had already paused its American wind projects following the election of Donald Trump, whose administration has taken a firm stance against expanding the sector.
With federal approvals still pending and policy direction unclear, the company faced the possibility of leaving the leases unused for several years.
This agreement now allows it to recover its investment and pivot toward projects aligned with current U.S. energy priorities.
