Empire Offshore Wind Project Faces Halt Work Order
In a recent development, Empire Offshore Wind LLC (Empire) has been directed to halt offshore construction activities on the outer continental shelf for the Empire Wind project. This directive comes in the form of a halt work order issued by the US government, specifically the Bureau of Ocean Energy Management (BOEM).
The order, received by Empire on 16 April, requires the company to cease all operations on the outer continental shelf until BOEM completes its review. Empire is currently in discussions with relevant authorities to seek clarification on the matter and is exploring potential legal avenues, including appealing the order.
Background and Impact
The Empire Wind project, which obtained a federal lease in 2017, has secured all necessary federal and state permits for its construction. Under contract with the New York State Energy Research and Development Authority (NYSERDA), Empire Wind aims to provide a significant new source of electricity for the State of New York. The project has already created employment opportunities for over 1,500 individuals in the US and has the capacity to power 500,000 homes in New York.
Following the issuance of the halt work order, Empire and its contractors have taken immediate steps to suspend relevant marine activities to ensure the safety of workers and the environment. The project, with a gross book value of approximately USD 2.5 billion as of March 31, 2025, including the South Brooklyn Marine Terminal, faces uncertainties regarding its impact on project activities and financing.
As of the same date, around USD 1.5 billion had been drawn under the project finance term loan facility. Equinor US Holdings Inc has provided guarantees for the equity commitment in the project financing. In the event of a complete stoppage, the USD 1.5 billion will be repaid from the equity commitment to the project finance lenders, potentially leading to termination fees towards suppliers for Empire Offshore Wind LLC.
Conclusion
The halt work order will be disclosed as a subsequent event in the first quarter 2025 report. Empire Offshore Wind LLC continues to navigate through the implications of the directive and remains committed to the successful completion of the Empire Wind project.