ESSEN (dpa-AFX) - German energy company RWE AG (RWEOY) has reached a $1.22 billion deal with the U.S. government to relinquish its offshore wind leases and redirect investment towards natural gas projects.
The agreement covers leases off the coasts of New York, California and Louisiana and marks the latest move by the Trump administration to scale back offshore wind development.
RWE said there was 'no path forward' to securing permits for the projects in the foreseeable future. The company paid $1.1 billion for its New York lease in 2022, while its Louisiana and California leases cost a combined $163 million.
Under the agreement, RWE will use $900 million to acquire a 16 percent stake in an unnamed Louisiana liquefied natural gas project, with the settlement proceeds helping fund construction. It will also spend $300 million on a turbine reservation agreement to develop a pipeline of 15 natural gas peaker plants across the U.S.
The deal is reportedly the largest agreement of its kind under the Trump administration, bringing taxpayer-funded settlements with energy companies to nearly $4 billion. RWE said it plans to invest about $19.6 billion in the U.S. over the next six years.
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