US Gulf CHOPS line unlikely to restart before October

Genesis' US Gulf Cameron Highway Oil Pipeline (CHOPS) is unlikely to restart normal operations before 1 October but the pipeline company continues to reroute all crude dedicated to the CHOPS pipeline into the Poseidon pipeline system, which it operates.

Initially service was expected to return on or before 12 September following platform damage from Hurricane Laura. The further delay is "based upon continuing data collection, analysis and physical tasks required to be undertaken," as the company continues to work with the US Bureau of Safety and Environmental Enforcement (BSEE) to resume service, according to a letter sent by Genesis to shippers late this afternoon.

The CHOPS pipeline system carries medium crude from the deepwater US Gulf to the Texas coast.

Inspections continue on the Garden Banks 72 platform, which saw damage from Hurricane Laura. The pipeline itself was undamaged, said Genesis chief executive Grant Sims. He declined to comment on the specific damage done on the platform.

Crude delivered into CHOPS comes ashore at Texas City and Nederland/Port Arthur, Texas. Volumes averaged about 197,000 b/d in the second quarter. The crude is sold as Southern Green Canyon (SGC).

The crude rerouted into the Poseidon system can reach the shore for delivery at Houma, Louisiana, or move from the Poseidon pipeline system into the Auger pipeline. Crude delivered into the Augur pipeline feeds into the Bonito crude stream that has its trading hub in St James, Louisiana.

Genesis owns 64pc of the Poseidon pipeline system, with Shell owning the remaining 36pc.

Genesis plans to provide its next CHOPS update on or before 22 September.

October SGC sold today at a 35¢/bl premium to the Cushing light sweet crude price.

By Amanda Smith