FERC has approved Northwest Pipeline GP's request to place into service two new pipelines that were relocated away from the Chevron Mining operations in Wyoming, which the pipeline company claims were responsible for causing cracks in its existing system.
In a lawsuit filed Jan. 23 in U.S. District Court for the District of Wyoming, Northwest alleged that Chevron's activities at the mine caused the earth surrounding two parallel interstate pipelines measuring 26- and 30-inches in diameter to crack and develop deep fissures during the summer of 2011. Northwest argued that Chevron should pay at least $20 million to cover the cost of of rerouting pipelines threatened by the mining operations (see Daily GPI, Feb. 1).
The lawsuit is still pending, with both sides in discovery, said a Northwest spokeswoman.
The letter order issued by the Federal Energy Regulatory Commission (FERC) gives Northwest, a subsidiary of Oklahoma-based Williams, the go-ahead to start up service on its Kemmerer Mine Relocation Project -- approximately 2.4 miles of 26-inch diameter and 30-inch diameter pipelines located west of Kemmerer, WY.
The mining operations at the center of the dispute are no longer owned by Chevron. In late January, Westmoreland Coal Co. completed its acquisition of the Kemmerer mine from Chevron for $194.5 million. However, Chevron appears to still be liable for the damage to the Northwest pipeline.
According to an 8-K report filed with the Securities and Exchange Commission on Jan. 17, Chevron indemnified and held Westmoreland harmless for "any losses arising from or in connection with the alleged damage to or business interruption of the [Northwest pipeline]...prior to the closing, including without limitation any losses arising from or in connection with any relocation of such gas transmission pipeline segment."
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