Landmark Agreement: BND and NextDecade announce partnership to fund channel deepening

The Brownsville Navigation District and NextDecade Corporation announced April 24 a landmark agreement set to transform the business landscape of the Rio Grande Valley.

The Brazos Island Harbor Channel Improvement Project (BIH) Funding Agreement commits NextDecade to privately fund key improvements to the Brownsville Ship Channel. The company will pay 100 percent of the deepening of the ship channel from the Gulf of Mexico to the western boundary of the proposed Rio Grande LNG project site at the Port of Brownsville. NextDecade will also fund the widening of the bend close to the entrance of the Brownsville ship channel to improve navigational safety.

“A wider, deeper channel not only benefits existing and future port customers, it also benefits our LNG partners,” said John Reed, Brownsville Navigation District chairman. “When complete, the deeper channel will make us among the deepest ports on the Gulf of Mexico, enhancing our competitiveness by closely matching the design features of the expanded Panama Canal.”

Planning to deepen the ship channel from 42 feet began in 2007 with a project feasibility study. In 2014, the U.S. Army Corps of Engineers (USACE) completed the feasibility study recommending deepening the channel to 52 feet. Estimates for the deepening project may be up to $350 million-with about 50 percent of the actual total paid for by NextDecade. In December 2016, the U.S. Congress authorized the channel deepening project, making the BIH eligible to receive federal funding.

With the new partnership, the BND expects to pay for the project with a combination of public-private partnership dollars, port funds and federal funds. The BIH project is expected start in the first half of 2020, with completion in 2023.

NextDecade plans to construct and operate the Rio Grande LNG project on a 984-acre site on the Port of Brownsville ship channel. The proposed LNG project could result in significant investment in Cameron County, creating nearly 6,000 direct jobs during construction. Operating at full scale, Rio Grande LNG is expected to contribute more than $500 million annually to U.S. GDP and create approximately 5,000 permanent jobs, the majority in Cameron County.

On April 26, NextDecade received the Final Environmental Impact Statement (FEIS) from the Federal Energy Regulatory Commission (FERC) for the Rio Grande LNG and Rio Bravo Pipeline projects. With the FEIS issuance, the FERC has established a 90-day federal authorization decision deadline of July 25, 2019.

Pending the achievement of further commercial milestones and receipt of a FERC order, NextDecade anticipates making a positive final investment decision on up to three of six trains of the Rio Grande LNG project by the end of the third quarter of 2019.