TotalEnergies Exits U.S. Offshore Wind Projects, Redirects $928 Million to Rio Grande LNG and Gulf of America Oil

TotalEnergies has agreed to abandon its two U.S. offshore wind leases and redirect nearly $928 million into domestic oil and natural gas production, including a major expansion of the Rio Grande LNG facility in South Texas. The agreement, signed with the U.S. Department of the Interior on March 23, 2026, marks one of the most significant corporate pivots away from offshore wind since the current administration took office.

Under the settlement, TotalEnergies will relinquish the Carolina Long Bay lease off the coast of the Carolinas, originally purchased in June 2022 for $133.3 million, and the New York Bight lease, acquired in May 2022 for $795 million. The Department of the Interior will reimburse TotalEnergies dollar-for-dollar for both leases, totaling approximately $928.3 million, on the condition that those funds are reinvested in U.S. oil, gas, and LNG development.

Rio Grande LNG Gets a $928 Million Boost

The primary beneficiary of the redirected capital is the Rio Grande LNG project near Brownsville, Texas, developed by NextDecade Corporation. TotalEnergies, which already holds a 10% direct participating interest in Train 4 of the facility and has committed to offtake 1.5 million metric tons per annum (Mtpa) of LNG from that train, will now funnel the bulk of the settlement reimbursement toward construction of Trains 1 through 4.

Rio Grande LNG is designed to produce up to 29 million tons of LNG per year at full buildout. Trains 1 through 3 reached final investment decision in July 2023, with a combined capital expenditure of $14.8 billion. Train 4, which received FID in September 2025, adds further capacity and deepens TotalEnergies involvement in the project.

In addition to the LNG buildout, TotalEnergies will invest in upstream conventional oil production in the Gulf of America and shale gas development, diversifying its U.S. hydrocarbon portfolio at a time when domestic production is being actively encouraged by federal policy.

Strategic Logic: European LNG Demand and U.S. Data Centers

TotalEnergies cited two primary drivers for the LNG pivot. First, Europe continues to require U.S. LNG supply following the loss of Russian pipeline gas, and the company sees Rio Grande LNG as a key long-term export asset serving European buyers. Second, surging electricity demand from data centers across the United States is creating sustained domestic appetite for natural gas, providing an additional off-take market for incremental production.

Patrick Pouyanné, Chairman and CEO of TotalEnergies, made the announcement at CERAWeek in Houston, framing the decision as an economically rational response to the cost structure of U.S. offshore wind compared to European projects. "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 U.S. consumers," the company said in its press release.

Offshore Wind Economics Under Scrutiny

The Carolina Long Bay and New York Bight leases were awarded in 2022 during a period of aggressive offshore wind expansion along the U.S. East Coast. Since then, a combination of rising construction costs, permitting obstacles, and shifting federal policy has prompted multiple developers to walk away from U.S. offshore wind commitments.

TotalEnergies follows BP, Equinor, and others in scaling back U.S. renewable project exposure, reflecting a broader recalibration of capital allocation toward higher-return fossil fuel and LNG assets. For TotalEnergies specifically, the swap preserves the dollar value of the original lease investment while converting stranded wind assets into productive upstream and midstream capacity.

Pricing Context

The announcement comes as global energy markets face acute supply stress. Brent crude surged past $110 per barrel on March 27, 2026, driven by the ongoing closure of the Strait of Hormuz following Iranian naval actions in early March. With approximately 20% of global oil supply and 25% of LNG transiting the strait, the disruption has placed a premium on non-Middle Eastern LNG supply routes, further validating TotalEnergies bet on U.S. LNG export capacity.

Henry Hub natural gas futures have also firmed in recent weeks as domestic demand tightens ahead of the summer cooling season and LNG export terminals run at or near capacity.

What Comes Next

Construction on Rio Grande LNG Trains 1 through 3 is underway, with first LNG deliveries targeted in the late 2020s. Train 4 development is in early-stage engineering. TotalEnergies has said it expects to invest $928 million specifically in 2026 across the LNG trains and its Gulf of America upstream positions.

The Interior Department framed the deal as a win for U.S. energy consumers, arguing that canceling the offshore wind leases removes projects that would have raised electricity costs. The department has pursued similar relinquishment agreements with other offshore wind lease holders this year.

For TotalEnergies, the pivot cements its position as a major U.S. LNG exporter alongside its existing portfolio of deepwater Gulf of America assets and Eagle Ford shale holdings.

Sources: TotalEnergies Press Release, U.S. Department of the Interior, World Oil