TotalEnergies Exits U.S. Offshore Wind and Redirects Capital to LNG

TotalEnergies has formally withdrawn from the U.S. offshore wind sector, signing settlement agreements with the Department of the Interior (DOI) to relinquish two major leases awarded in 2022 – Carolina Long Bay and New York Bight. The move marks a significant strategic reversal for the French energy major in one of the world’s most closely watched emerging offshore wind markets.

Under the terms of the agreement, the company will recover its lease payments and reinvest an equivalent amount into U.S. gas and power projects, with a particular emphasis on liquefied natural gas (LNG) and upstream hydrocarbons.

CEO Patrick Pouyanné framed the decision as both economic and policy-aligned, arguing that offshore wind development in the U.S. remains structurally expensive and risks driving up electricity costs for consumers.

The capital reallocation underscores TotalEnergies’ growing conviction in LNG as a cornerstone of its U.S. strategy. The company confirmed that funds will help support the development of the 29 million tonne per annum Rio Grande LNG project, as well as broader oil and gas activities.

This pivot is further reinforced by a recently signed letter of intent with Glenfarne for the long-term offtake of 2 million tonnes per year of LNG from the Alaska LNG project over 20 years—pending a final investment decision.

The repositioning aligns with TotalEnergies’ status as the largest exporter of U.S. LNG, with 19 million tonnes shipped in 2025. The company is increasingly leveraging its integrated model—spanning upstream production, liquefaction, and trading—to capitalize on rising global demand for flexible gas supply.

TotalEnergies’ exit reflects broader headwinds facing the U.S. offshore wind sector. While Europe has successfully scaled offshore wind with supportive regulatory frameworks and established supply chains, the U.S. market has been plagued by cost inflation, permitting delays, and supply chain constraints.

Several developers have already renegotiated or canceled projects due to rising capital expenditures and unfavorable power pricing structures. TotalEnergies’ internal assessments appear to have reached a similar conclusion: that offshore wind in the U.S. is currently less competitive compared to alternative generation sources.

The company explicitly pointed to the availability of more cost-effective technologies to meet rising electricity demand—particularly relevant as U.S. power consumption surges due to data center expansion and electrification trends.