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Pipeline Damage Costs|Fall Primarily to U.S.

HOUSTON (CN) - The U.S. government must cover the bulk of $13.8 million in damage to a pipeline after faulty Army Corps of Engineers navigational charts led to a collision, a federal judge ruled.

A barge owned by Weeks Marine hit and ruptured Contango Operators' natural gas pipeline on Feb. 24, 2010, while dredging the Atchafalaya Channel offshore Louisiana.

The released gas and condensate ignited on the water's surface, and the resulting fire could be seen from miles away.

U.S. Coast Guard officials who hustled to the scene ultimately found that the dredge crew had been following outdated and incorrect navigational charts.

It took Contango 35 days to get the pipeline repaired and back online.

Contango, a Houston-based independent oil and gas firm, and its insurer, Certain Underwriters, sued Weeks Marine and the Army Corps of Engineers in 2011.

The federal complaint claimed that the United States, one and the same with the Corps of Engineers, and Weeks Marine were negligent under federal maritime law.

Though the charts included in the dredging contract given to Weeks Marine in August 2009 did not show Contango's pipeline, the United States tried to shift all the blame to the dredger by arguing that the National Oceanic and Atmospheric Administration had published an updated chart on its website on Nov. 25, 2009, showing Contango's pipeline.

U.S. District Judge Sim Lake would not buy it Wednesday and refused to release the federal government's liability.

"Nothing in Weeks Marine's contract with the Corps required Weeks Marine to independently determine whether there were pipelines that crossed the Atchafalaya Channel other than those identified in the Corps' specifications," the 52-page order states.

The ruling also keeps Marine Weeks on the hook.

"Given the significant damage that could result from striking a pipeline, the availability of current pipeline data in NOAA charts ... and the ease of accessing such data, the court concludes that it was unreasonable for Weeks Marine to rely solely on pipeline information provided earlier by the Corps," Lake wrote.

The judge did, however, give Weeks Marine some solace in divvying up the blame.

Because it was common practice at the time for dredgers to rely solely on pipeline data provided by the Corps of Engineers, Lake said the United States is responsible for 60 percent of Contango's damages. Weeks Marine carries 40 percent of the blame.

The parties owe Contango more than $13.8 million for their repair costs, lost gas, deferred production damages and prejudgment interest, according to the ruling.

Lake also set the post-judgment interest rate at 0.14 percent compounded annually.

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