Port of Brownsville receives $43M loan for ship channel deepening

The Texas Transportation Commission last month approved a $43 million low interest loan for the Brownsville Navigation District/Port of Brownsville, which will cover the port’s share of a project to deepen a portion of the 17-mile-long Brownsville Ship Channel to 52 feet from its current depth of 42 feet.

Deepening the channel, a top priority of the port for decades, will enable the port to accommodate larger vessels and remain competitive on the global market. The official name given to the undertaking is the Brazos Island Harbor Channel Improvement Project.

The $43 million loan is part of $400 million in loans through TTC’s Ship Channel Improvement Revolving Fund for projects in Brownsville and Beaumont, made available through a bill passed during the 88th Legislature and signed into law by Gov. Greg Abbott last year.

TTC Commissioner Steven D. Alvis thanked Abbott for his support of a “vital industry,” characterizing Texas ship channels and seaports as “economic engines within our state.”

“Ship channel improvement projects are extremely costly, often making it incredibly difficult to make improvements,” Alvis said. “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.”

Also included is $357 million for the Sabine-Neches Navigation District in Port Arthur to deepen the Sabine-Neches Waterway from 40 to 48 feet at an estimated cost of $1.8 billion.

With the Brownsville project, the port is responsible for $71.5 million of the total $139.5 million cost for this portion (phase two) of the project, according to TTC. The U.S. Army Corps of Engineers in 2022 announced the allocation $68 million for phase two — deepening the channel from the port’s turning basin to the western boundary of Rio Grande LNG. That money was made available through the Bipartisan Infrastructure Law signed into law by President Joe Biden in 2021.

Phase one of the project involves deepening the channel from the Rio Grande LNG facility to the Gulf. Per an agreement between the port and Rio Grande LNG parent company NextDecade, NextDecade will cover the entire cost of phase one, dredging for which is already underway. The agreement was contingent upon a Final Investment Decision to move ahead with construction of the LNG facility. That decision came in July 2023.

Last month, however, the Federal Energy Regulatory Commission announced it intended to prepare a new, supplemental Environmental Impact Statement on the Rio Grande LNG project and associated Rio Bravo Pipeline Project, following an Aug. 6 ruling by the D.C. Circuit Court vacating FERC’s authorizations for the two projects as well as for another proposed LNG project at the port, Texas LNG, which has not broken ground.

The D.C. court’s ruling was in response to a lawsuit filed against FERC by the Sierra Club, the city of Port Isabel and other petitioners claiming that the agency did not adequately consider environmental justice impacts and greenhouse gas emissions of the three projects as mandated by the National Environmental Policy Act and the Natural Gas Act before ordering authorizations for the projects. Now the supplemental EIS must be conducted before FERC can again make a determination on whether to authorize the projects.

For phase two, USACE’s Galveston District in August awarded a contract in the amount of $104 million to Callan Marine Ltd., with dredging work to begin this month and estimated completion in June 2026.

Brownsville Port Director and CEO William Dietrich said the $43 million loan through the state is essential to the successful completion of the deepening project, and thanked Abbott and TTC.

“This infrastructure investment will strengthen the port’s competitive advantage as the leading maritime hub in South Texas and support economic development for the region,” he said.