BROWNSVILLE, RGV – Brownsville Navigation District held a news conference recently to announce funding to deepen the Port of Brownsville ship channel.
NextDecade Corporation, which is considering building a liquefied natural gas export terminal at the port, will partly fund Brazos Island Harbor Channel Improvement Project. The company has an option to lease 984 acres at the port.
Among the speakers at the news conference were John Reed, chairman of BND, Matt Schatzman, president and CEO of NextDecade, U.S. Deputy Secretary of Energy Dan Brouillette, Texas Secretary of State David Whitley, Cameron County Judge Eddie Treviño, Jr., and Brownsville Mayor Tony Martinez.
In a news release, BND said deepening the ship channel was a “landmark agreement” that would “transform the business landscape of the Rio Grande Valley.”
The Rio Grande Guardian, in partnership with Ron Whitlock Reports and RGV Public Rio 88 FM, has transcribed the speeches made at the news conference.
Here are the remarks of:
Matt Schatzman, president and CEO of NextDecade Corporation
Thank you, chairman. Good morning, deputy secretary, secretary of state, judge, mayor and all the distinguished guests.
My name is Matt Schatzman and as the chairman said, I am the president and chief executive officer of NextDecade Corporation.
I would like to welcome you to a signing ceremony for an agreement funding a significant portion of the Brazos Island Harbor Channel Improvement Project. The BIH as we liked to call it. Marking another important step in the continued partnership between the Brownsville Navigation District and NextDecade.
First I would like to give you a brief update on the Rio Grande LNG project. And for those of you who are not familiar with NextDecade we are a liquefied natural gas (LNG) development company focused on LNG export projects and associated pipelines in the state of Texas. Our first and largest project is Rio Grande LNG, located here in the Port of Brownsville. We are also developing the Rio Bravo Pipeline to supply feed gas to Rio Grande LNG. Our second project, Galveston Bay LNG is located in Texas City, Texas. It will be developed after the Rio Grande LNG project.
Rio Grande LNG is designed to export natural gas from producing basins throughout the state of Texas, including the Permian Basin and Eagle Ford Shale. At full development Rio Grande LNG represents the largest planned infrastructure project in the state of Texas. Rio Grande LNG is expected to create nearly 6,000 direct jobs during construction and approximately 5,000 permanent jobs, with the majority of these permanent jobs located in Cameron County.
We expect Rio Grande LNG to contribute more than $35 billion to U.S. gross domestic product during construction and more than $500 million annually once commercial operations commence. In addition to creating thousands of jobs in Cameron County, Rio Grande LNG will improve the global environment by, one, helping countries around the world reduce their emissions by using clean, burning natural gas from the United States. For example, natural gas emits half as much carbon dioxide as compared to coal when used for power generation. Rio Grande LNG will also improve the global environment by eliminating the unnecessary environmentally harmful flaring of natural gas in the Permian Basin. Rio Grande LNG will also harness U.S. innovation through the use of proven technologies from Air Products Baker Hughes GE and others. These state-of-the-art technologies will ensure operational safety and reliability.
NextDecade is in the final stages of a competitive bid process for the engineering, procurement and construction of Rio Grande LNG. We are reviewing formal bids received earlier this week. By the third quarter of 2019 we expect to chose a leading engineering and construction company to build Rio Grande LNG under a lump sum, turnkey contract.
Rio Grande LNG continues to achieve major project milestones and is on track to reach a final investment decision in the late third quarter of 2019. On Oct. 12, 2018, the Federal Energy Regulatory Commissioner FERC, issued Rio Grande LNG’s draft environmental impact statement. Subsequently, the Texas Commission on Environmental Quality issued a series of air permits for the project. On March 6, 2019, NextDecade executed a long-term lease with the Brownsville Navigation District for approximately a thousand acres here at the port. On March 8, 2018, NextDecade entered into its first 20-year sell and purchase agreement with Shell, the largest portfolio LNG company in the world and a recognized pioneer in the global LNG business.
NextDecade expects to announce additional commercial contracts over the coming months to support a positive FID by the end of the third quarter of 2019. And this Friday, April 26, NextDecade expects to receive a final environmental impact statement from the FERC and we anticipate receiving approval of Rio Grande LNG and Rio Bravo Pipeline in July of 2019.
I would like to thank the many members of the committee who have supported Rio Grande LNG from the very beginning. Without your years of support this project would not be as advanced as it is today. We are within months of a positive FID and very soon will begin to realize the benefits of your years of support. To the City of Brownsville, to Cameron County, and the Rio Grande Valley; members of the community have been integral to our success today and we look forward to continuing our work together in the coming years.
As many of you know, we are committed to maximizing hiring in Cameron County. We started planning with the key workforce institutions, such as Texas Southmost College, to support this outcome. There is much more to do but preparations for local hiring are underway.
The BIH funding agreement we are signing today represents another important step towards realizing the incredible potential for large-scale job creation in Cameron County. Under the terms of the funding agreement, NextDecade will privately fund key improvements to the Brownsville ship channel. These improvements will benefit existing port tenants and pave the way for future development of the port. Specifically, the improvements include the deepening of the ship channel from the Gulf of Mexico to the Rio Grande LNG project site, and the widening of the bend close to the entrance of the Brownsville ship channel to improve commercial navigation.
The deepening of the ship channel from the Gulf of Mexico to the Rio Grande LNG project site represents a significant portion of the BIH. In fact, some of you may know that the BIH project was recently identified by the U.S. Army Corps of Engineers as one of only eight projects in the United States that are being evaluated to be part of the Corps’ public-private partnerships, or P3, pilot program. As we understand it, classification of BIH as a P3 by the Corps will accelerate the issuance of approvals and permits and numerous other benefits to ensure smooth and execution of the overall project.
With NextDecade agreeing to fund these improvements, a significant portion of the BIH project will be completed without using any public funds. This is a true public-private partnership and shows NextDecade’s commitment to the Port of Brownsville, Cameron County and the entire Rio Grande Valley. We are honored to help grow this great community and we look forward to playing an even larger role as a good neighbor and a leading employer for years to come.
Thank you again Deputy Secretary, and other dignitaries for being here today. We greatly appreciate your support.