Shell, TotalEnergies eye new projects in Gulf of Mexico and it’s not oil & gas

With the first-ever offshore wind lease sale in the U.S. part of the Gulf of Mexico on the horizon, several companies have prequalified for the auction. Not surprisingly, Shell and TotalEnergies, who have already secured offshore wind leases on the U.S. East Coast and operate oil and gas assets in the Gulf, are on the list. The two majors are not the only prequalified companies from the oil and gas sector, and the waters offshore the southern U.S. have also attracted a solar and storage project developer.

This month, the U.S. Bureau of Ocean Energy Management (BOEM) will hold the next offshore oil and gas lease sale for acreage in the Gulf of Mexico (GOM), as required by the Inflation Reduction Act (IRA) of 2022.

While both BOEM and some oil and gas players are now well into preparing for the fossil energy auction, a few of the latter are also preparing to bid for lease rights to build offshore wind farms, the first time BOEM will offer GOM acerage for this technology.

The U.S. Department of the Interior (DOI) announced on 22 February that it was proposing the first-ever offshore wind lease sale in the Gulf of Mexico. The areas planned to be offered include a 102,480-acre lease site offshore Lake Charles, Louisiana, and two areas offshore Galveston, Texas, one covering 102,480 acres and the other 96,786 acres.

Two days after DOI announced the proposed auction, BOEM published a Proposed Sale Notice (PSN) in the Federal Register, opening a 60-day public comment period to gather input on which, if any, of the two Texas areas should be offered in the Final Sale Notice (FSN).

During the comment period, running until 25 April, BOEM is also inviting feedback on several lease stipulations related to job creation and ocean users and other stakeholders.

The PSN document published in the Federal Register also contains a list of the companies that BOEM prequalified for the lease sale and, looking at this initial list, the oil and gas sector is not only interested in harnessing the oil and gas resources in the Gulf of Mexico but also its wind energy.

While more potential developers are expected to prequalify for the auction after the PSN was issued, BOEM has so far prequalified eight companies and consortia:

• Shell
• Bluepoint Wind
• TotalEnergies
• Enterprize Energy
• Hecate Energy
• Avangrid
• US Mainstream Offshore
• 547 Energy

Shell already has offshore wind projects in an advanced stage in the U.S. through the Atlantic Shores Offshore Wind joint venture with EDF Renewables and the SouthCoast Wind Energy (formerly Mayflower Wind) joint venture with Ocean Winds.

With EDF Renewables, Shell holds development rights for an offshore wind zone off the New Jersey coast, where the partners plan to build the 1.5 GW Atlantic Shores Project 1, which was awarded offshore wind capacity in New Jersey’s second offshore wind solicitation and is expected to be put into operation in 2027/2028.

Last year, the joint venture was also announced as one of the provisional winners in the record-breaking lease sale in the New York Bight.

In Massachusetts, the oil and gas major and Ocean Winds are moving forward with their 2.4 GW SouthCoast Wind project, formerly known as Mayflower Wind. This February, BOEM issued a Draft Environmental Impact Statement for the project, clearing the first step towards permitting consent.

Shell’s offshore wind partner in Massachusetts has also prequalified for the Gulf of Mexico lease sale but in a joint venture with New York-based Global Infrastructure Partners.

The same team is also among the winning bidders in the New York Bight auction, where the joint venture named its 1.7 GW project Bluepoint Wind.

Ocean Winds also emerged as one of the winners of the first-ever offshore wind lease sale on the US Pacific Coast, having secured rights for an area off California in December 2022. This auction was also the first that the US organised to procure floating wind projects.

TotalEnergies, the oil and gas major which is already pouring one third of its investments into renewable energy and clean fuel projects, has several offshore wind developments in the U.S. with plans for more continuing to be revealed.

In 2022, the company acquired all offshore wind assets of the joint venture it had established with EnBW after the German developer exited the U.S. market.

The companies also won a lease at the New York Bight auction, the second most expensive lease site, where TotalEnergies will now develop a 3 GW project planned for operation in 2029. In May last year, TotalEnergies also secured lease rights for an offshore wind site in Carolina Long Bay.

According to information available on the offshore wind lease sale planned for the Gulf of Maine, TotalEnergies could be one of the bidders there as well.

Enterprize Energy, which also does business in the oil and gas sector, is looking at developing one of its next offshore wind projects in the U.S. as it is also on the prequalification list for the Gulf of Mexico.

The Singaporean company is already developing offshore wind projects in Vietnam.

In 2021, Enterprize Energy entered into an agreement with the government of the Brazilian state of Rio Grande do Norte to identify and develop opportunities for offshore wind, green hydrogen, and green ammonia projects off the country’s northern coastline.

One of the more interesting prequalified, potential bidders for offshore wind in the Gulf of Mexico is Hecate Energy.

The U.S. company has so far been involved in developing solar energy and energy storage, with numerous facilities comprising those technologies either built or under development.

Hecate Energy last year submitted an unsolicited lease application to BOEM for a site offshore the state of Washington, where the company wants to build a floating wind farm with a generation capacity of 2 GW, named Cascadia Offshore Wind Farm.

The company also has an oil and gas connection through one of its shareholders, Spanish Repsol, who acquired a 40 per cent stake in Hecate Energy in 2021.

Avangrid, the U.S. arm of the Spanish renewable energy giant Iberdrola, is a well-known bidder in the country’s offshore wind auctions.

The company is building the first commercial-scale offshore wind farm in the U.S., the 800 MW Vineyard Wind 1 off Massachusetts.

The developer also plans to bring to realisation a 1.2 GW wind farm offshore Massachusetts, named Commonwealth Wind, and has already secured power purchase agreements for the project, however, the company decided to back out of the agreements in December last year and re-bid in the next state solicitation.

Avangrid is also developing the 2.6 GW Park City offshore wind farm in the state which, together with the Commonwealth Wind project, makes up the New England Wind development.

The company may also bid in the offshore wind auction that will be held for areas in the Gulf of Maine.

Mainstream Renewable Power, through US Mainstream Offshore, has so far been on the lists of qualified bidders for both New York Bight and the California lease sales.

The company is developing an offshore wind farm in Vietnam and has also been among the bidders in Scotland’s ScotWind seabed lease auction.

At the end of last year, Mainstream Renewable Power announced that it was exploring the upcoming Celtic Sea Floating Offshore Wind Tender in the UK, which will be launched in 2023, together with Canadian developer Maple Power.

Last summer, Norwegian company Aker Offshore Wind was integrated into Mainstream Renewable Power, creating a renewable energy player with a 27 GW portfolio including solar, and onshore and offshore wind projects.

Texas-based 547 Energy is a clean energy investment platform of Quantum Energy Partners.

The investor has also emerged across several bidder lists in the U.S., including those for the floating wind auction offshore California, the record-breaking lease sale in New York Bight, and the auction for the areas in Carolina Long Bay.

One of the companies in 547 Energy’s portfolio is the floating wind specialist BlueFloat Energy.

Spanish BlueFloat has numerous projects proposed worldwide, including its home country and other EU Member states, Taiwan and Australia in the Asia Pacific region, and a whopping number of projects in South America.