Serna: Projected revenues from Texas LNG to Cameron County over 19 years is $76.7 million

Texas LNG did submit an application for a tax abatement, they did pay the necessary fee.

So, this is a rendering of the proposed site for Texas LNG which will also be at the Port of Brownsville. This is a site location map from the appraisal district, the location where they propose to construct their LNG.

And again, this is just an aerial view of the location. What Texas LNG has done is leased a 625-acre site at the port of Brownsville. They are proposing a $2.8 billion capital investment to construct two LNG trains.

They are proposing at least 1,274 construction jobs over six years with a total construction payroll of $568 million. They would also have 100 permanent jobs at $90,000 annual salaries for an annual payroll of $9 million a year.

The direct taxable spending is almost $37 million. They would have a goal of hiring 35% regional residents. They will host six job fairs and vendor information events in Cameron County. And they will participate in at least three Cameron County Workforce Solution programs and partner with at least two local educational institutions to assist Cameron County residents develop specialized skills and experience necessary to qualify for jobs with the company.

Economic impact

Almost $1.5 billion in indirect revenue to Cameron County businesses. (About) 809 indirect jobs; $229 million indirect salaries; almost $15 million in indirect taxable spending; $3.9 million in new sales taxes collected by cities in the county.

I also want to mention that to support this development, AEP is constructing an 138 kV transmission line at a cost of $86 million and that investment would be fully taxable for this project. It would also have a $200 million taxable investment by a third party to construct 10 miles of 42-inch pipeline to connect Valley Crossing pipeline to the Texas LNG site.

Again, the Texas LNG (project means) job creation to our local area, a positive impact to the local economy, increased sales to local businesses, sales tax revenues for surrounding cities in Cameron County, workforce training and development, and an increase in revenues to the county, schools and surrounding communities. It would have a positive budgetary impact for education, road improvements, quality of life projects, drainage improvements, etc.

An aerial view of what the Texas LNG export terminal at the Port of Brownsville will look like. (Photo credit: Texas LNG)

Their proposed abatement terms would be 95% abatement of the general fund (M&O) and road and bridge (R&B) portions of the tax rate during the ten-year incentive period. Texas LNG would pay 100% of the interest and sinking (I&S) portion of the tax rate in addition to 5% of the general fund M&O and R&B tax rate during the ten-year incentive period. Texas LNG would also make payments, including PILOT payments, totaling $30 million over 12 years. The proposed tax abatement is a 40% net abatement of the total tax rate during the ten-year incentive period.

Projected revenues to the county over 19 years is $76.7 million. That’s inclusive of the abatement and the projected tax abatement over the ten-year incentive period is $26.5 million. I also want to point out that that includes the PILOT payments.

The PILOT payments to the county would be as follows: Texas LNG would pay $1.5 million in 2025 in addition to 100% of the taxable value of the property.

So, basically, they take 100% of taxable value, they would pay that tax, plus an additional $1.5 million. They would pay another $1.5 million in 2026. In addition to 100% of the taxable value of the property.

And then during the ten-year incentive period, they will make PILOT payments totaling $2.7 million each year. For a total between all the payments of $30 million.

And again, Judge, this is another rendering of the site.

And now I’m going to ask a representative from Texas LNG to come up and make a presentation.

Editor’s Note: The above commentary was provided by Dan Serna, deputy county administrator for Cameron County, at a Cameron County Commissioners Court meeting on June 4, 2024. At the meeting, county commissioners held a public hearing to secure comment on a proposal to give Texas LNG a tax abatement. Serna can be reached via email at: dan.serna@co.cameron.tx.us.

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