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1
Peel the shrimp and set aside, reserving the shrimp shells.
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2
In a large saucepan, bring the water to a boil over medium heat.
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3
Add the shrimp shells and reduce the heat to medium-low.
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4
Cook for 15 to 20 minutes, stirring occasionally.
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5
Cool the shrimp stock, and strain.
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6
Discard the shells.
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7
In a large saucepan, bring 3 1/2 cups shrimp stock and 1/2 teaspoon salt to boil over medium heat.
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8
Add the grits, stirring well.
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9
Add the butter and stir until melted.
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10
Cover, and reduce the heat to low.
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11
Cook until thickened, stirring occasionally, about 15 to 20 minutes.
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12
Add the Velveeta, and stir until melted.
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13
Set aside and keep warm.
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14
In a large skillet over medium heat, add the chorizo and cook until browned and crumbly, about 5 minutes.
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15
Remove the chorizo, to a plate or bowl, leaving the drippings in the skillet.
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16
Add up to 3 tablespoons olive oil, if necessary.
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17
Put the skillet over medium heat, and add the onion.
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18
Cook for 4 minutes, then add the red pepper and jalapeno, and cook, stirring frequently, for 3 minutes.
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19
Sprinkle with the flour, stirring constantly for 3 minutes.
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20
Gradually add 2 cups of shrimp stock, stirring to scrape the bottom of the skillet and to prevent lumps.
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21
Stir in the cooked chorizo, and increase the heat to medium-high.
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22
Bring the mixture to a boil, and cook until slightly thickened.
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23
Add the shrimp, and cook until they turn pink, about 2 to 3 minutes.
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24
Remove the skillet from the heat, then add the cream and lime juice.
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25
Stir in the green onion, cilantro and remaining 1/2 teaspoon salt, and pepper.
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26
Transfer the grits to a serving platter and spoon the shrimp mixture over the top.
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27
Garnish with green onion and serve.