Posted on October 9, 2024
The Port of Brownsville’s Brazos Island Harbor Channel Improvement (“BIH”) project made progress in September, securing a low interest $43 million loan from the Texas Department of Transportation — a critical funding boost that brings the historic channel-deepening project closer to reality.
At the Texas Transportation Commission’s regular meeting, held Thursday, Sept. 26, the commission approved a $43 million Ship Channel Improvement Revolving Fund (“SCIRF”) loan to provide the Port of Brownsville revenue for its local share of qualified costs necessary to deepen the Brazos Island Harbor Channel. The commission approved $400 million in SCIRF loans for two projects near Beaumont and Brownsville. The funding is the result of a bill passed in the 88th Legislature and signed by Texas Governor Greg Abbott in 2023.
The Port of Brownsville, the only deepwater seaport located on the U.S.-Mexico border, ranks 50th in the nation among 150 maritime ports for the movement of waterborne cargo, according to U.S. Army Corps of Engineers’ (“USACE”) 2022 Annual Report. The major commodities moving through the port include wind energy components, refined petroleum products, ores and minerals, steel and other metals, grains, and a variety of aggregates. In 2023 total cargo tonnage at the port increased 17 percent to 17.8 million tons, compared to the 15.2 million tons handled in 2022.
The transformative BIH project will deepen the 17-mile-long Brownsville Ship Channel from 42 feet to 52 feet, enhancing navigational safety and unlocking new opportunities for larger commercial vessels to access South Texas — positioning the port as a critical gateway for global trade. This infrastructure improvement will have long-lasting positive effects on the regional economy, significantly boosting economic activity and job creation in the Rio Grande Valley. According to the USACE, the BIH channel deepening project will create more than 6,000 new jobs at the peak of construction and more than 800 full-time permanent jobs.
“Texas ship channels and seaports are economic engines within our state, and I want to thank Governor Greg Abbott for his support for this vital industry,” said Texas Transportation Commissioner Steven D. Alvis. “Ship channel improvement projects are extremely costly, often making it incredibly difficult to make improvements. The foresight of the Governor and the Texas Legislature to make Ship Channel Improvement Revolving Fund loans available is critical to ensure Texas ship channels are prepared to accommodate larger vessel sizes, resulting in a more robust and resilient supply chain.”
A Public Private Partnership
The BIH project, comprised of two phases, is funded through the USACE’s Public-Private Partnership (“P3”) with the Port of Brownsville and NextDecade Corporation, Rio Grande LNG’s parent company.
In 2019, NextDecade announced a landmark agreement with the Brownsville Navigation District to pay 100 percent of Phase 1 of the deepening project from the western boundary of its lease site along the ship channel to the entrance of the channel, as well as the development of two ship berths and a turning basin for its Rio Grande LNG facility. The Port of Brownsville and the USACE will execute Phase 2, which will deepen the channel from the turning basin area to Rio Grande LNG’s site. In March 2022, the federal government announced the allocation of $68 million for Phase 2, provided under the Infrastructure Investment and Jobs Act Appropriations Law. In August 2024, the USACE’s Galveston District awarded a contract in the amount of $104 million to Callan Marine Ltd. for Phase 2 of the BIH project. Work is scheduled to begin October 2024 with an estimated completion date of June 2026.
