In accordance with a halt-work order issued by the US government, Empire Offshore Wind announced it will safely halt the offshore construction in waters of the outer continental shelf for the Empire Wind project.
On 16 April, Empire received notice from the Bureau of Ocean Energy Management (BOEM), ordering Empire to halt all activities on the outer continental shelf until BOEM has completed its review.
Empire said it is engaging with relevant authorities to clarify this matter and is considering its legal remedies, including appealing the order.
The federal lease for Empire Wind was signed with the US administration in 2017. Empire Wind 1 has validly secured all necessary federal and state permits and is currently under construction. The project is being developed under contract with the New York State Energy Research and Development Authority to provide a source of electricity for the state of New York. The construction phase has put more than 1,500 people to work in the US. Empire Wind 1 has the potential to power 500,000 New York homes.
Empire said it is complying with the order affecting project activities for Empire Wind. Upon receipt of the order, immediate steps were taken by Empire and its contractors to initiate suspension of relevant marine activities, ensuring the safety of workers and the environment.
As of 31 March, Empire Wind has a gross book value of approximately $2.5 billion, including the South Brooklyn Marine Terminal.
Equinor’s ownership ties to Empire are through Equinor Wind US.
The total amount drawn under the project finance term loan facility as of 31 March was approximately $1.5 billion. Empire is in the process of ascertaining the effect on the project and project financing. Equinor US Holdings has provided guarantees for the equity commitment in the project financing. In a full-stop scenario, the $1.5 billion will be repaid from the equity commitment to the project finance lenders and Empire Offshore Wind will be exposed to termination fees toward its suppliers.
The halt-work order is expected to be disclosed as a subsequent event in the first quarter 2025 report.