LOS ANGELES (CN) — A massive LA-area gas leak that spewed thousands of metric tons of methane into the air will cost Southern California Gas Co. $665 million — almost double previous estimates.
SoCalGas discovered a ruptured well leaking methane gas at the Aliso Canyon storage field on Oct. 23 last year. The ruptured 60-year-old well was not plugged until Feb. 11.
Sempra Energy, SoCalGas' parent company, revealed the new estimate in its first-quarter 2016 financial results.
"While there was no material impact on first-quarter 2016 earnings, SoCalGas today said its updated estimate of the costs related to the Aliso Canyon leak is $665 million. Concurrently, the company has recorded an insurance receivable of $660 million," Sempra said in a statement.
SoCalGas was forced to temporarily relocate the thousands of LA-area residents from the Porter Ranch, Chatsworth, Granada Hills and Northridge communities because of the leak. While the company asserted that methane was not harmful, residents complained that the foul-smelling mercaptan odorant added to detect leaks, and other harmful chemicals made them sick.
Residents said they also suffered nausea, dizziness, headaches, nosebleeds and fatigue.
The energy company is facing dozens of lawsuits in connection with the leak.
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