At the CERAWeek by S&P Global conference in Houston on Monday, US Interior Secretary Doug Burgum joined TotalEnergies boss Patrick Pouyanne, as TotalEnergies signed the settlement agreements to relinquish its New York Bight and Carolina Long Bay offshore wind leases, both awarded in 2022, along with its partners.
Under the terms of the settlement, TotalEnergies will recover the lease fees paid and will invest an equal amount in the development of US gas and power production and exports.
TotalEnergies did not provide the amount of the lease fees, but the DOI said in a separate statement that the company has committed to invest approximately $1 billion.
“TotalEnergies’ studies on these leases have shown that offshore wind developments in the United States, unlike those in Europe, are costly and might have a negative impact on power affordability for US consumers,” TotalEnergies said.
Since other technologies are available to meet the growing demand for electricity in the US in a “more affordable way, TotalEnergies considers there is no need to allocate capital to this technology in the US,” it said.
Pouyanne said 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,” he said.
In addition to Rio Grande LNG, TotalEnergies also noted that it has recently signed a letter of intent (LOI) 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.
TotalEnergies is a shareholder in the first phase of the Rio Grande LNG project, which includes three trains, and the fourth train.
In July 2023, NextDecade took the final investment decision on the first three Rio Grande LNG trains.
In September and October last year, NextDecade made the final investment decisions on the fourth and fifth trains at its Rio Grande LNG facility.
This brings the total expected LNG production capacity under construction at Rio Grande LNG to approximately 30 mtpa.
