CHOPS set to resume crude flows to onshore Texas on Feb. 1

Houston — A bypass pipeline will come online Feb. 1 to restore service to the Cameron Highway Oil Pipeline System that moves crude oil from the US Gulf of Mexico to Texas port hubs, Genesis Energy confirmed on Jan. 25.

The 500,000 b/d, offshore crude system, called CHOPS, has been down since late August when an associated platform in the Gulf of Mexico was damaged by Hurricane Laura. After several delays, Genesis in December 2020 said it hoped to finish a temporary bypass pipeline in January to get the crude oil flowing again. Genesis now says it will resume normal operations for the beginning of February.

"Customers should continue to place your nominations accordingly on CHOPS for February and beyond," Genesis said in its announcement.

CHOPS is the only system in the Central Gulf of Mexico that delivers crude to onshore Texas. Southern Green Canyon crude oil flows on CHOPS, which delivers to Texas end points in Port Arthur and Texas City, are still mostly being redirected to the Poseidon or Auger pipelines to locations onshore in Louisiana.

The increased flows of medium sour crude to the Louisiana coast, where other Gulf of Mexico produced crudes such as Mars are delivered, have helped to weaken Mars values since August.

Genesis also has been negotiating with the US Bureau of Safety and Environmental Enforcement for the necessary repairs to the damaged Garden Banks 72 platform that will eventually bring CHOPS back to normalcy without the need for the bypass. But Genesis also was delayed while seeking approval from BSEE for approval of the bypass construction.

Genesis now says it will only fully repair the damaged platform if it decides to add crude oil capacity to CHOPS.

"The bypass was the fastest path towards allowing CHOPS to move exactly the same amount of oil to shore that it could prior to Hurricane Laura," said Genesis Vice President Dwayne Morley in an email response. "We also determined that the GB 72 platform can easily and economically be reinforced to provide intermediate pumping capability and contribute to significantly increasing the flowing capacity of CHOPS, if and when we determine such incremental capacity is required by our existing and future customers, although we have other options as well."

Genesis originally planned to bring CHOPS back by October and, after delays, aimed to work with BSEE to have it online by late November. But none of those goals proved achievable.

Genesis' 350,000 b/d Poseidon Pipeline instead goes to southeastern Louisiana. Genesis also is working with Shell's Auger Pipeline that takes a similar route as Poseidon.