Liquids Pipeline Strike

A backhoe working in a pipeline right-of-way struck and damaged a natural gas liquids pipeline carrying product from the Texas Panhandle to the Houston area. Fortunately, there was no explosion and no injuries.  However, the ensuing fire, visible from as much as 50 miles distant, caused significant damage to the pipeline that was struck, damaged two other pipelines running nearby, damaged overhead high voltage power lines and reportedly caused lost revenue for a nearby producing well.  Rimkus was retained to evaluate the losses claimed by the various parties. more...

The third-party claimants’ assertions were relatively straightforward.  We addressed each, pointed out errors and improper charges, and our client was able to address and resolve them without issue.  However, the owner of the pipeline that was struck presented a complex claim for lost revenues, lost product consumed in the fire, lost profit opportunity, and even a component for pain and suffering.  The total claim was in excess of $2 million.

Rimkus experts were able to address all aspects of the claimed loss.  We found instances of overstatement of the product that was lost, duplication of lost revenues (losses appearing in both the lost pipeline throughput revenue and the downstream mark-up of the price for the product being carried) as well as the inclusion of cost for items such as salaried company personnel time which was not an extra expense. 

Participating in settlement discussions with attorneys for both sides, we were able to point out these discrepancies to the satisfaction of the claimant.  As a result, the damage claim was settled amicably between the parties for less than 50% of the original demand.