Genesis Energy has divested a 36% interest in the Cameron Highway Oil Pipeline System (CHOPS) in the US for around $418m to an undisclosed firm.

The US-based diversified midstream energy master limited partnership plans to use proceeds from the sale to repay the outstanding of $300m under its term loan.

The remainder will be used to reduce outstanding amounts under the revolving part of its senior secured credit facility.

With the completion of the transaction, Genesis holds an operatorship stake of 64% in CHOPS.

Genesis Energy CEO Grant Sims said: “This transaction confirms the significant value and longevity of our midstream assets focused on moving the low-carbon footprint crude oil produced in the deepwater areas of the central Gulf of Mexico and importantly knocks off over a full half turn from our bank leverage ratio calculated on a pro forma basis.

“The transaction also provides Genesis with significant financial flexibility to use our increasing levels of free cash flow to continue to reduce debt and/or pursue the highest return projects in our portfolio. As we look forward, we remain very encouraged with the trajectory of our market-leading and diversified businesses.”

The Cameron oil pipeline is designed to deliver crude oil from major deepwater oil fields to markets on the Texas Gulf Coast.

The midstream firm has also decided to fund the remaining capital required for the expansion of the Granger production facility, above the $250m minimum, from its asset level preferred security.

Genesis plans to use internally generated free cash flow and available senior secured credit facility to fund the remaining capital for the expansion project.

The expansion project aims to boost soda ash production by approximately 750,000t per year.