Virginia Gov. Ralph Northam announced on Tuesday an agreement for European energy company Ørsted to lease a portion of the Portsmouth Marine Terminal for offshore wind staging materials, moving Hampton Roads closer to becoming an “offshore wind hub,” according to the Tuesday press release.

The agreement was ratified Tuesday morning by a unanimous vote of the Virginia Port Authority Board of Commissioners. According to the press release, Ørsted could use the site to work on its Coastal Virginia Offshore Wind project with Dominion Energy, as well as for staging materials and equipment for Ørsted projects throughout the East Coast.

The lease will run through at least 2026, if fully executed, during which time Ørsted plans to install nearly 3,000 megawatts of wind energy projects in the United States, the press release states.

“This is a big step towards making Virginia a leader in wind energy and offshore wind manufacturing,” Northam stated in the press release. “With the Port of Virginia at its helm, the Hampton Roads region has the trained workforce and the nautical know-how to become a vital hub for offshore wind development. We welcome Ørsted and look forward to the tremendous opportunities ahead of us.”

Ørsted is an energy company based in Frederica, Denmark. According to orsted.com, the company develops, constructs and operates offshore and onshore wind farms, solar farms and energy storage facilities, bioenergy plants and provides energy products to its customers.

The agreement between the Port of Virginia and Ørsted is for an initial lease of 1.7 acres at the Portsmouth Marine Terminal through 2026, with options to expand to 40 acres, the press release states.

If fully executed, the agreement could be worth nearly $13 million in lease payments and result in site upgrades worth more than $20 million for cranes and improvements to a section of the terminal’s berth to ensure heavy load capacity.

Those investments would prepare the site for activities such as pre-assembly, staging and loading of wind turbines for other Ørsted projects, according to the press release.

“It is our hope that today’s announcement demonstrates the potential we see in Virginia as a central player in the burgeoning U.S. offshore wind industry,” Thomas Brostrøm, president and chief executive officer of Ørsted North America, Offshore, stated in the Tuesday press release. “Much activity will be taking place in Virginia and beyond in the coming months and years, and Portsmouth Marine Terminal is well-situated to meet our needs both now and in the future.”

Portsmouth Marine Terminal is one of the Port of Virginia’s two multi-use terminals in the Norfolk Harbor. The facility covers 287 acres, is located on deep water, has on-dock rail access, and offers open space for storage and staging, the press release states.

“This is a strategic decision by leaders in the offshore wind industry to take advantage of Virginia’s world-class port,” John F. Reinhart, chief executive officer and executive director of the Virginia Port Authority, stated in the press release. “By welcoming Ørsted and allowing it to leverage the Portsmouth Marine Terminal, we could jumpstart an almost entirely new industry.

“The result is job creation, economic investment, diversification of the Virginia economy, and clean, renewable energy.”