The Department of the Interior has agreed separate deals with the Ocean Winds-led Bluepoint Wind and Golden State Wind project to end their offshore wind leases and redirect investment into other energy projects in the US.
Global Infrastructure Partners will invest the $765m it originally paid for the Bluepoint Wind lease into a US-based liquefied natural gas (LNG) facility.
The Ocean Winds-Reventus Power joint venture behind Golden State Wind will be refunded $120m in exchange for an agreement to invest an equal amount in the development of U.S. oil and gas assets, energy infrastructure, and/or LNG projects along the Gulf Coast.
The department said the agreements provide dollar-for-dollar reimbursement for leases it deems impractical without taxpayer subsidies. The deals support investment in “reliable, secure energy infrastructure”, it added.
The deal is similar to one announced last month that will see French oil major TotalEnergies recover nearly $1bn in exchange for a pair of leases on the east coast.
“President Trump is focused on providing affordable and reliable energy to American citizens,” said secretary of the interior Doug Burgum.
“The companies that bid for these offshore wind leases were basically sold a product in 2022 that was only viable when propped up by massive taxpayer subsidies.”
Bluepoint Wind is a partnership between OW and Global Infrastructure Partners to develop a 2.4GW site of New Jersey. Golden State Wind is a tie up between OW and Reventus Power to pursue a 2GW floating project of California.
“The Department of Justice is committed to working with parties to reach agreements that are in the best interests of the Nation and the American people – protracted litigation benefits neither, and I am proud to have helped facilitate today’s historic deals that advance the President’s Energy Dominance Agenda,” said associate attorney general Stanley E. Woodward, Jr.
“Under these agreements, the American taxpayer will be the beneficiary and not a source of endless subsidies for these types of projects.”
“We appreciate the very constructive engagement with Secretary Burgum and the Department of the Interior and are pleased to have reached a practical resolution based on our shared commitment to pragmatic outcomes,” said Salim Samaha, chair of Midstream & LNG, Global Infrastructure Partners, a part of BlackRock.
“We look forward to continuing to deploy capital into conventional and other energy sources in furtherance of the twin goals of increasing US energy independence and affordable energy.”
“We welcome the opportunity to engage constructively with the administration on this agreement and acknowledge the clarity they have provided with this decision and deal,” said Michael Brown, chief executive officer of Ocean Winds North America.
“Our priority remains disciplined capital allocation and delivering reliable energy solutions that create long-term value for ratepayers, partners, and shareholders.”
Oceantic Network said the administration’s move would increase costs for consumers and undermine offshore wind development.
“Unable to defend its offshore wind actions in court, the administration is using taxpayer dollars to buy foreign companies out of legally executed offshore wind leases,” said Sam Salustro, SVP of Policy & Market Affairs at Oceantic Network.
“The economic damage and costs to consumers’ pocketbooks are staggering.”
Both partnerships have agreed not to pursue US offshore wind projects in the future.