Army Error Cost it $4 Million, Firm Says

HOUSTON (CN) - A pipeline company claims the Army Corps of Engineers cost it $4 million by giving a dredger bum navigational charts to dredge offshore Louisiana. Using the Army's charts, Contango Operators says, the co-defendant dredgers struck and ruptured its natural gas condensate pipeline.

Contango, a Houston-based independent natural gas and oil company, and its insurer sued the Army Corps of Engineers and the dredger, Weeks Marine, in Federal Court.

Contango says it built and buried its 20-mile pipeline, which crosses the Atchafalaya River Channel, "in compliance with permit requirements and specifications issued and approved" by the Corps of Engineers.

The Corps of Engineers is responsible for maintaining the river channel; it hired Weeks Marine to dredge it, according to the complaint.

The Corps of Engineers was to "provide accurate dredging permits and navigational charts, showing known hazards in the area to Weeks Marine," but the Corps' charts "did not show the Contango pipeline," Contango says.

Weeks Marine's dredge struck and ruptured Contango's pipeline on Feb. 24, 2010, the complaint states.

"As a result of the incident, the pipeline was severely damaged, causing the release of gas and condensate which ignited on the water's surface," Contango says. "The resulting fire was visible some miles away and continued for approximately 90 minutes. Contango personnel on a nearby platform saw the fire and took immediate action to shut in the pipeline.

"The US Coast Guard responded to the scene and advised the dredge crew that their navigational charts were outdated and incorrect."

Contango and its insurer, Certain Underwriters, seek more than $4 million in damages for negligence, pipeline repair costs, lost gas and delayed production.

Contango is represented by Karen Milhollin of Houston.

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