El Paso Corporation (EP)

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El Paso to Pay $15.5M in DOJ Settlement

Thursday July 26, 5:09 pm ET

El Paso to Pay $15.5M Penalty to Settle Allegations in a Deadly 2000 Pipeline Explosion

WASHINGTON (AP) -- El Paso Corp. will pay a $15.5 million penalty and spend at least $86 million to modify its natural gas pipeline system to settle federal allegations in a deadly pipeline explosion, U.S. regulators said Thursday. The settlement with the Justice and Transportation departments comes under the Pipeline Safety Act and follows a 2000 explosion of an El Paso Natural Gas Co. pipeline that killed 12 people in New Mexico. The Justice Department said the cause of the explosion was a significant reduction in pipe wall thickness due to severe internal corrosion.

Among the actions El Paso agreed to undertake under the settlement are collecting and analyzing liquid samples for corrosive properties whenever a pipeline is opened on its system.

El Paso shares fell 50 cents, or 2.9 percent, to close at $16.90 after ranging between $12.82 and $18.56 over the past year.