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Keppel AmFELS and Pasha Hawaii celebrate steel cutting for two new containerships

BROWNSVILLE, Texas – Construction of the first of two containerships is underway at the Port of Brownsville.

On Sept. 25, Keppel AmFELS cut the first steel plates for the M/V George III, one of two ‘Ohana Class vessels the Brownsville-based company is building for the Pasha Hawaii fleet, which provides service to the Hawaii/Mainland trade lane.

Once built, the new 774-foot U.S. Jones Act vessels will carry 2,525 TEUs, with a sailing speed of 23.0 knots. The design of the ship’s hull has been fully optimized using computational fluid dynamics and will be one of the most hydrodynamically efficient hulls in the world. Delivery of the vessels is expected in 2020.

“We are pleased to be able to support the Pasha Hawaii fleet with the design, engineering and construction of two state-of-the-art containerships that will be highly efficient, sustainable and safe,” said Simon Lee, President of Keppel AmFELS. “Our design philosophy includes a construction methodology that is easy to execute and maximizes the capabilities of our yard.”

The U.S. Department of Commerce Economic Development Administration will award the port a $1.8 million grant for the construction of a Public Vessel Assembly and Erection Pad, which will assist businesses in the ship-building industry like Keppel AmFELS.

“This grant demonstrates the federal government’s confidence in the Port of Brownsville and its role in helping create 700 high-paying new jobs for our community, while facilitating a new industry for the state of Texas — shipbuilding,” said Brownsville Navigation District Chairman John Reed. “This investment in infrastructure reinforces that Brownsville is the port that works, with ships built here stamped ‘Made in Texas’ for the world to see.”

According to estimates, the project is expected to generate $3 million in private investment.

The new vessels will operate fully on LNG from day one in service, substantially improving the vessels’ environmental footprint. Energy savings will also be achieved with a state-of-the-art engine, an optimized hull form, and an underwater propulsion system with a high-efficiency rudder and propeller.

“We are marking the first production milestone of our new LNG-powered ships, and honor the legacy of the Pasha ‘Ohana.”, said George Pasha, IV. “We also commend the remarkable talents and organization of the highly skilled shipbuilders on the Keppel team who are working hard to transform these steel plates into the most environmentally efficient vessels for the Hawaii trade.”

GALVESTON, Texas – The U.S. Army Corps of Engineers’ STURGIS vessel left this morning for the Port of Brownsville for her final journey.  In two to three days, she will arrive at the International Shipbreaking Limited facility where she will be dismantled for recycling. The vessel is being towed from Galveston where it has undergone radiological decommissioning that included the safe removal of all components of the deactivated nuclear reactor and all associated radioactive waste that was formerly onboard the STURGIS.

The STURGIS was the world’s first floating nuclear power plant.  She was converted from a World War II Liberty Ship in the 1960s to a mobile nuclear plant. Over the past three years in Galveston, Texas, the U.S. Army Corps of Engineers and it prime contractor, APTIM Federal Services, has been implementing the challenging and complex efforts to decommission the MH-1A — the deactivated nuclear reactor that was onboard the STURGIS vessel.

As part of that process, the U.S. Army Corps of Engineers safely removed and shipped more than 1.5 million pounds of radioactive waste and recycled more than 600,000 pounds of lead. Throughout the project, continuous environmental monitoring was performed and the results confirmed there was no evidence of radioactive material, lead or increased radiation exposure from the STURGIS project during its time in the Port of Galveston.

With the successful removal of all radioactive waste from the STURGIS and extensive radiological surveys that confirmed all radioactive waste had been removed, the STURGIS was cleared to be towed to Brownsville for traditional shipbreaking.

“We’re extremely proud of our safety record for the STURGIS decommissioning work in Galveston,” said U.S. Army Corps of Engineers Project Manager Brenda Barber. “Now that we’ve confirmed that all of the radiological contamination has been safely removed, the last phase of the STURGIS project will be towing the vessel to Brownsville where she will undergo final shipbreaking and recycling.”

Once in the Port of Brownsville, the STURGIS will undergo additional radiological surveys as part of ISL’s standard operating procedures.

“In addition to the rigorous testing and retesting performed by the Corps of Engineers verifying that no radioactive materials remain on the STURGIS, ISL officials will conduct another independent survey to confirm that the vessel is clean,” said Eduardo A. Campirano, Port Director and CEO of the Port of Brownsville. “We are confident the STURGIS is safe and poses no harm to the facilities of the port and the surrounding areas, otherwise it would not be allowed here.”

Once in the Port of Brownsville, the shipbreaking is expected to be completed in early 2019.  Based on current estimates, approximately 5,500 tons of steel and other assorted metals from the ship will be recycled.

APTIM Federal Services and the U.S. Army Corps of Engineers team will continue to oversee the completion of the overall project in Brownsville.

STURGIS History/Background: The STURGIS has had a unique life since first being built in the 1940’s as a World War II Liberty Ship, the SS Charles H. Cugle. After serving in World War II, the ship was converted into the world’s first floating nuclear plant in the 1960’s, housing the MH-1A nuclear reactor. Before being shut down in 1976, the STURGIS’ nuclear reactor was used to generate electricity for military and civilian use in the Panama Canal. The reactor was de-fueled, decontaminated for long-term storage, and sealed before being towed to the James River Reserve Fleet at Joint Base Langley Eustis, Virginia; where it was stored and maintained since 1978, except for times of periodic dry dock maintenance. In 2012, its formal decommissioning effort began as part of a broader effort to decommission the Army’s retired nuclear reactors through the Army Deactivated Nuclear Power Plant Program. After award of the decommissioning project contract, the STURGIS was ultimately towed 1,750 miles from Virginia to Galveston, Texas in April 2015 for its final decommissioning. That decommissioning effort was completed this summer with the safe removal of all components of the deactivated nuclear reactor and associated radioactive waste that was formerly aboard the STURGIS and the vessel is being towed to Brownsville, Texas for final traditional shipbreaking.

At Brownsville, a gateway for steel into Mexico, bilateral trade shows no signs of cooling

BY JUDE WEBBER / Financial Times

Article published Tuesday, July 24, 2018

A huge crane unloads giant steel slabs off a ship from Russia, destined for factories in Mexico. Queues of trucks, some of the 800 a day heading across the border, fill up with oil products. Steel coils, animal feed, sugar and colossal wind turbines lie in warehouses or lots awaiting their journey south.

This is the Port of Brownsville in Texas, the biggest gateway for steel into Mexico, a big handler of US oil products heading over the border and the front line in Washington’s escalating trade war with its neighbour and Nafta partner. The US ratcheted up tensions this month by filing complaints against Mexico and other countries at the World Trade Organization.

Yet so far US and Mexican tariffs have failed to dent cross-border business here and booming bilateral trade shows no sign of cooling. US-Mexican trade rose 10 per cent in the first five months of this year to $249bn, versus the same period in 2017 when Donald Trump’s presidency began. Meanwhile the US trade deficit rose 2 per cent to $30.6bn over the same period, according to US figures.

“We have not seen any impact yet. We’re waiting to see but our customers don’t appear to be too concerned,” said Eduardo Campirano, the port’s chief executive. “Our primary steel mover is just as aggressive as last year and is talking about increasing throughput.”

With 95 per cent of its cargoes heading to Mexico, Brownsville has boosted trade volumes by 50 per cent and almost doubled revenues since 2008 and, at $5.3bn, the foreign-trade zone that it administers is the second biggest in the US by export and import value. Whatever happens with tariffs, “trade won’t dry up,” said Shannon O’Neil at the Council on Foreign Relations.

On June 1, Mr Trump used national security arguments to impose tariffs on steel and aluminum, including from Mexico, as the countries struggled to make headway after nearly a year of talks to upgrade the North American Free Trade Agreement. Mexican retaliation was swift, in the form of tit-for-tat duties on steel and an array of US exports, from cheese and pork to apples and bourbon that the US this month challenged at the WTO.

“It’s hard to imagine a port being so sanguine about the impact of tariffs,” said Antonio Garza, a former US ambassador to Mexico and Brownsville native. “Ultimately they are corrosive and trade restrictive, not expansive.”

“Brownsville will be able to weather the tariff storm,” said Chris Wilson at the Wilson Center. “With the US economy growing at a healthy rate, the demand for steel will remain high, meaning import volumes will stay strong. Of course prices will go up, but they will be pushed as far down the supply chain as possible.”

Whereas a diversified port can adapt to changing markets, the deeply entwined cross-border auto and manufacturing industries show how much is at stake for Mexico. “Maybe Brownsville doesn’t care if it’s oil or steel but it could have a big impact on workers in Mexico,” Ms O’Neil said.

Part of the reason Brownsville has proved resilient is its location. “It is a very good gateway into Mexico . . . You won’t find another port to replace it that easily,” said Bill Ralph, a marine economist at consultancy RK Johns & Associates. “Brownsville has the logistics connections that most ports can’t offer.”

At the same time, with Brownsville mostly handling steel in transit to Mexico, it is unlikely to be hurt by steel tariffs on US imports in the same way as other ports, he said. If Mr Trump invokes national security rules against car imports, “there isn’t any US port or border crossing that wouldn’t feel some effect”, Mr Ralph said.

For now, it is business as usual at this deepwater seaport. The Russian steel is bound for Monterrey, Mexico’s industrial capital just 200 miles away. “We haven’t seen any indication this [tariff war] is going to hurt us,” said Donna Eymard, deputy port director.

Nor have the tariffs dented planned investments. A $1.6bn Big River Steel mill on port land is at the due diligence stage. “If their market is Mexico, they can benefit from all the logistical advantages, save a lot of money and have higher margins even if punitive tariffs apply,” said Steve Tyndal, senior director for marketing and business development at the port.

In addition, three companies — Annova LNG, Rio Grande LNG and Texas LNG — are in the final stage of obtaining permits to build a trio of gas liquefaction plants representing nearly $39bn in investment that could make Brownsville the top US LNG export hub, Mr Tyndal said.

Sprawling across 40,000 acres that are also home to eagles and giant tarantulas, the port has adapted to other crises. “When there was the devaluation of the peso [in 1994], we thought it was going to kill us, but it turned out to be one of the best years we had,” said Antonio Rodríguez, director of cargo services, who has been at the port for 26 years.

Steel, renewable energy and other cargoes passing through Brownsville could increase under Mexican president-elect Andrés Manuel López Obrador, who takes office on December 1. He wants to boost the domestic oil industry to make Mexico less reliant on US fuel and to invest in infrastructure and development in Mexico’s poor south.

“We are optimistic there are always opportunities for us,” said Mr Campirano. “We could be an exporter of Mexican refined products down the road.” Or as Ms Eymard puts it: “It’s like when you drive your car to the grocery store. There are different routes but you take the one you know. People don’t change.”

https://www.ft.com/content/13cba8b0-89ea-11e8-bf9e-8771d5404543

Copyright The Financial Times Limited 2018. All rights reserved.

BROWNSVILLE, Texas — There is no place like home.

After 18 months, the Brownsville Navigation District and Port of Brownsville staff returns to their home in the completely repurposed and enlarged administration office campus at 1000 Foust Road.

In January 2017, the port’s administrative offices were temporary relocated to the Keppel AmFELS complex at 20000 SH 48 while the port’s main building underwent a needed renovation and expansion.

The renovated office campus adds 12,473 square feet of new office space for a total of 26,500 square feet. The project included remodeling the two existing pods, adding a third pod, and building a new office adjacent to the port’s Foust Road entrance to accommodate a truck permitting office with a truck staging area and a modern records facility.

The repurposed offices have been completely gutted, retrofitted and cost-effectively modernized to accommodate current and future communications and technology demands. The new third pod includes a commission chamber and public room that will house the Brownsville Navigation District Commission meetings. The building also includes a special area dedicated to preserve the port’s past with historic maritime memorabilia and port photos.

This is the second renovation done to the old building complex, constructed in 1973. The building previously underwent an expansion in 1983.

Brownsville Architect Roberto J. Ruiz was selected by the BND to oversee the project, with ZIWA Corporation winning a competitive bid to construct the project at an estimated cost of about $8 million.

The renovated office campus, located at 1000 Foust Road, adds 12,473 square feet of new office space for a total of 26,500 square feet.