Olympic endorses proposed fuel pipeline settlement

By OGJ editors
WASHINGTON, DC, Dec. 13 -- An Olympic Pipe Line Co. official said a pending settlement with state and federal authorities ends most of the outstanding criminal, civil, and environmental cases surrounding a June 1999 fatal gasoline pipeline rupture near Bellingham, Wash.

"We believe this is a fair and just settlement, and that it brings us all closer to moving beyond this terrible tragedy. This settlement is also an important final step in fulfilling our commitment to resolve all matters surrounding the accident fairly and expeditiously," said Lawrence B. Peck, Olympic chairman.

The Seattle Times reported Olympic would pay about $25 million and Shell about $75 million in fines. Federal officials confirmed that as being accurate. A US federal judge may approve the settlement as early as this month, sources said.

"We have worked hard to gain the trust, confidence, and respect of the citizens of Bellingham and Washington State that we will operate a safe pipeline. We have put safety procedures in place for operation of the pipeline to ensure that nothing resembling this incident ever happens again. We will work hard every day to continue to meet these goals. Our commitment to safety and the environment is something we take very seriously," Peck said in a statement Wednesday.

The US Department of Justice and the US Environmental Protection Agency sued Olympic Pipe Line Co. and Shell Pipeline Co. LP in connection with the rupture. Under the settlement, both companies are expected to plead no contest to a felony charge each for violating pipeline safety laws.

At the time of the accident Olympic Pipe Line Co. had three shareholders: Equilon Pipeline LLC (a Royal Dutch Shell Group/Texaco Inc. joint venture); GATX (25%); and ARCO (now part of BP PLC).

Today, Olympic is owned by two shareholders—BP (about 62.5%) and Shell (about 37.5%). BP Pipelines took over as the operator of Olympic on July 1, 2000.

The National Transportation Safety Board ruled Oct. 8 that the rupture probably resulted from several factors, including inadequate inspection procedures and poor oversight of valve testing (OGJ Online, Oct. 14, 2002).

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