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Alyeska, feds close in on settlement
The owners of Alyeska Pipeline Service Co. are about to decide whether to settle a lawsuit brought against federal regulators, a recent court filing indicates.
Alyeska is the Anchorage-based consortium that runs the 800-mile trans-Alaska oil pipeline on behalf of owners BP, ConocoPhillips, ExxonMobil, Chevron and Koch Industries.
On Sept. 19, federal lawyers representing the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration filed papers indicating Alyeska’s civil suit challenging a PHMSA fine might soon be resolved.
“Alyeska is managed by representatives of each company known as the Owner Committee,” the papers said. “Per Alyeska internal procedures, a settlement of a lawsuit must be approved by the Owner Committee.”
In recent days, lawyers and other representatives for the two sides have exchanged settlement proposals.
“The parties expect to present a final written agreement to the Alyeska Owner Committee for approval before the end of the month,” the Sept. 19 filing said.
Fine challenged as excessive Alyeska sued PHMSA on Aug. 3, 2010, in Alaska federal court. The suit challenges a $263,000 fine.
The case has been stayed for months as the two sides attempt to reach a settlement.
PHMSA issued a final order against Alyeska on Jan. 13, 2010, alleging the company committed two violations of pipeline safety regulations.
First, Alyeska was too slow to obtain a vendor’s full report on a 2004 pig run on the pipeline, PHMSA said. A pig is a device that travels through a pipeline to test for hazards such as corrosion.
Second, Alyeska failed to promptly repair a dent discovered during the summer of 2004 on top of a buried segment of pipe near mile 546.
Among other arguments, Alyeska said in its suit that the fine was excessive.
—Wesley Loy
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