The company says recent rainfall and the city’s long-term water strategy made its proposed privately financed desalination plant commercially unviable.

CORPUS CHRISTI, Texas — AXE H2O has ended its pursuit of a proposed privately financed desalination plant in Corpus Christi, saying improved water conditions and the city’s long-term approach to water development made the project no longer commercially viable.

The company announced Wednesday it would discontinue its efforts after spending months promoting a proposal for a 150-million-gallon-per-day seawater reverse osmosis desalination plant that would have supplied Corpus Christi and other South Texas communities.



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“The emergency conditions that compelled our focused action no longer exist,” the company said in a statement. “Following extensive technical research, community engagement, and a thorough evaluation of the current market landscape, AXE H2O has made the decision to discontinue its pursuit of this project.”

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AXE H2O spokesperson Damon Gibson said recent rainfall dramatically changed the business case behind the proposal.

“The short answer is, God saved us. It rained too much,” Gibson said. “The cheapest water you can get is that which comes to us from God, and we have an oversupply of that.”

Gibson said the company’s proposal was designed to serve more than Corpus Christi, with San Antonio expected to become one of its largest customers. But as reservoirs recovered and forecasts pointed to continued rainfall, the project shifted from an emergency response to a much longer-term prospect.

“This, which has turned into much more of a long-term prospect than an immediate emergency, it just wasn’t,” Gibson said. “It became an unviable venture, and the board voted to cease operations.”

He added that the company’s privately financed model depended on investors seeing returns within a few years.

“You have to understand that private investors want 12- to 15-percent a year back on their investment, and they don’t want it in 10 years,” Gibson said. “They want it in two years. They want it in three years.”

In its statement, AXE H2O also said Corpus Christi’s preferred approach to expanding its water supply no longer aligned with the company’s business model.

“The City of Corpus Christi leadership has expressed a preference for incremental and diversified water management strategies rather than a singular, anchored large-scale approach,” the statement reads. “Our privately financed model fundamentally requires a specific industrial framework, concentrated bulk demand, and long-term strategic planning to be viable as a commercial enterprise. Thus, we have concluded that the structural conditions necessary for our business model do not exist in the current Corpus Christi environment.”

AXE H2O first presented its proposal to the Corpus Christi City Council in May after the city paused its Inner Harbor desalination project. The company proposed building a desalination plant capable of producing up to 150 million gallons of water per day at the Barney M. Davis site, with much of the water intended for customers beyond Corpus Christi.

Gibson said the Barney M. Davis site, owned by San Antonio-based CPS Energy, remained the company’s preferred location because it simplified development.

“CPS owning the site reduced the complication in a lot of ways,” Gibson said. “They had expressed an interest, whether it was AXE H2O or some other developer, in allowing a desal plant to be built and operated on their property.”

Gibson also acknowledged the proposal became caught in the broader debate over Corpus Christi’s future desalination strategy. He said some opponents of the city’s paused Inner Harbor project embraced AXE H2O’s proposal as an alternative, while some viewed it as a threat. Gibson said the company later met with stakeholders from across the debate in an effort to ease those concerns.

In response to the announcement, the City of Corpus Christi thanked AXE H2O for its collaboration and said it respects the company’s decision.

“The City of Corpus Christi extends its sincere appreciation to AXE H2O for their time, collaboration, and constructive engagement throughout our discussions regarding potential water supply solutions.

In a recent online statement, AXE H2O noted:

‘The City of Corpus Christi leadership has expressed a preference for incremental and diversified water management strategies rather than a singular, anchored large-scale approach. Our privately financed model fundamentally requires a specific industrial framework, concentrated bulk demand, and long-term strategic planning to be viable as a commercial enterprise. Thus, we have concluded that the structural conditions necessary for our business model do not exist in the current Corpus Christi environment.’

The City respects AXE H2O’s business model and its determination regarding these structural requirements. We appreciate their valuable insights as we continue to evaluate various avenues to secure a long-term, drought-resistant water supply.

Corpus Christi remains dedicated to a diversified, resilient water strategy that balances immediate regional needs with long-term sustainability. We thank AXE H2O for their efforts and wish them continued success.”