EPNG fined $15.5 million; pipeline rehab ordered

By OGJ editors
HOUSTON, July 30 -- In the first judicial settlement brought under the Pipeline Safety Act, the Justice Department and the US Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) has fined El Paso Natural Gas Co. (EPNG) $15.5 million and mandated comprehensive rehabilitation of its entire 10,000 mile pipeline system. The action stems from an investigation of the August 2000 explosion on EPNG's pipeline system in Carlsbad, NM, that killed 12 people.

EPNG will spend at least $86 million for widespread, comprehensive modifications of its natural gas pipeline system to resolve alleged corrosion-control violations.

The complaint, filed concurrently with the settlement agreement, alleges that EPNG failed to employ personnel qualified in corrosion-control methods, failed to investigate and mitigate internal corrosion in two of its gas pipelines, and failed to suitably monitor those pipelines to determine the effectiveness of steps taken to minimize internal corrosion.

"The comprehensive pipeline modifications EPNG will complete as part of today's settlement will help to ensure that the severe internal corrosion that resulted in such a tragic accident will not be repeated," said Ronald J. Tenpas, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division.

Severe internal corrosion causing major reduction in pipe wall thickness was determined to be the cause of the 2000 explosion. The settlement requires EPNG to inspect for corrosion and rehabilitate all the pipe on its interstate gas pipeline system, which extends from the San Juan, Permian, and Anadarko basins to markets in California, Arizona, New Mexico, Oklahoma, Texas, and northern Mexico.

EPNG will be required to:
-- Modify its pipeline system to enable certain segments to be inspected by in-line inspection tools to determine the wall thickness of the steel pipe.
-- Remove pipeline drips that are not as effective as use of cleaning pigs on the system.
-- Collect and analyze liquid samples for corrosive properties whenever a pipeline, vessel, pig trap, meter tube, or tank is opened on the system.
-- Comply with gas quality guidelines that require monitoring of potentially corrosive gas quality constituents in the gas stream, and report semiannually that it complied with operating procedures for enforcement.
-- Conduct annual reviews of site-specific plans and review all nondestructive examination (NDE) records and high resolution magnetic flux leakage data to determine if any facility needs to be inspected, reinspected, or monitored to determine the occurrence of wall loss.
-- Develop a training program for EPNG's corrosion-control specialists and engineers.

The consent decree, lodged July 27 in the US District Court in New Mexico, is subject to a 30-day public comment period and approval by the federal court. It is available at (http://www.usdoj.gov/enrd/Consent_Decrees.html).

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