The Cameron Highway System is a 380-mile, 24 and 30-inch oil pipeline which extends along the Outer Continental Shelf ("OCS") of the Gulf of Mexico and delivers crude oil from major deepwater oil fields to markets on the Texas Gulf Coast. The initial project was announced in February 2002, and currently has dedications from the Holstein, Mad Dog, Atlantis, K2, Constitution and Ticonderoga fields, all located in the deepwater Green Canyon area offshore Louisiana. The system originates at the Ship Shoal 332 A/B Hub as a 30" diameter pipeline, extends across the GB 72 platform and then splits into two 24" diameter pipelines at the High Island A5-C platform. One 24" leg terminates in Texas City, Texas, while the second terminates in Port Arthur, Texas.

Recognizing that potential bottlenecks existed in the oil infrastructure of south Louisiana, CHOPS was developed as a means to safely and reliably move production from the rapidly growing deepwater trends of the Gulf of Mexico to the Texas Gulf Coast refining markets. By selecting an offshore route which follows the OCS and connects directly into the Texas markets, CHOPS has the potential to gather oil from multiple prolific deepwater regions of the Gulf of Mexico, including Atwater Valley, Green Canyon, Walker Ridge, Garden Banks and Keathley Canyon. Producers in these regions benefit from not only from the flow assurance provided by the 30" pipe and pumping capacity of the system, but also from the optionality and market flexibility provided by the two 24" legs and the 7 direct-connect delivery points.

By directly connecting to the seven delivery points, shippers can access both refineries and terminals without the need to contract with third parties or incur additional pipeline or storage fees. The structure of multiple delivery points also provides the shippers with additional liquidity for their oil. Not only does CHOPS connect directly to three (3) Texas City area refineries, but also provides access to the Beaumont, Baytown, Cushing, Patoka and Houston markets though the multiple terminal connections. It was the intent of the originators of CHOPS that this design would provide for greater flow assurance and market optionality than the alternative infrastructure options existing in the Gulf of Mexico. We hope that our customers, both upstream and downstream, realize these efficiencies and benefit from their relationship with Cameron Highway.