Northwest Pipeline has filed suit against oil and natural gas giant Chevron, seeking $20 million to cover the costs of relocating a portion of its pipeline away from Chevron's Kemmerer, Wyoming, coal mine.
Northwest, an interstate gas pipeline unit of Tulsa-based Williams Partners, said in papers filed in Wyoming's federal district court last week that operations and explosions at Chevron's Kemmerer Coal Mine created cracks in the ground beneath Northwest's gas line south of town over the past summer, forcing Northwest to eventually rebuild a portion of the line on safer ground.
"The complaint seeks to recover costs Williams incurred and continues to incur to monitor, isolate, stabilize, bypass and relocate its 26-inch- and 30-inch-diameter lines in the vicinity of Chevron Mining Kemmerer mine after land movement was detected in the area," Northwest spokeswoman Michele Swaner said Monday, adding that Northwest's parent "took these steps to ensure the safety and integrity of its facilities and to prevent disruption of service to its customers."
Representatives of San Ramos, California-based Chevron did not return a call for comment Monday, but Northwest, in its court filing, says Chevron has maintained its right to mine coal at Kemmerer and was not liable for any damage to Northwest's pipeline nor for the cost of moving it further from the mouth of the mine.
Meanwhile, Chevron is seeking to exit the coal business in the US and is scheduled to sell the Kemmerer Mine Tuesday to Englewood, Colorado-based Westmoreland Coal for $193 million and the assumption of debt as part of its change in business plans.
Swaner said the timing of the suit is a coincidence, and not designed to prevent the sale. Representatives at Westmoreland Coal did not return a call Monday for comment.
Westmoreland said last week it was selling another $125 million in promissory notes, in addition to a $150 million offering the week prior, for cash to pay for the Kemmerer Mine and provide working capital.
The court filing says Chevron and a consulting geologist informed Northwest of the cracks in the ground, and the geologist told Northwest that the cracks around the mouth of mine "were becoming worse" and "there was a 'decent possibility' that the northern wall of the mine would move, causing a massive shift in the earth underlying the pipelines."
Northwest claims it kept Chevron informed of its plans as it rerouted the pipeline near Kemmerer, and made it clear it expected Chevron to pay for the work.
