CALGARY, Alberta (Reuters) - Plains Midstream Canada must hire a third party to audit its pipelines in Alberta, Saskatchewan, Manitoba and Ontario, regulators said on Thursday, an order that came after the company failed to comply with previous safety directives.
Plains Midstream, a subsidiary of Plain All American Pipeline (PAA.N), has been under scrutiny by Canada’s National Energy Board since a corrective action plan in 2010 highlighted safety and environmental issues.
The company has had two spills in Alberta in recent years. The Rainbow pipeline near Peace River leaked about 37,000 barrels of oil in April 2011 and the Rangeland pipeline spilled around 3,800 barrels of crude near Sundre in June 2012.
NEB spokesman Darin Barter said ordering a third-party audit was a serious, though not unprecedented, step to deal with Plains, which had over the past four years demonstrated an inability to comply with regulations.
“We are taking the view that the company needs to take the regulatory system in Canada seriously. We want to see an increase in safety and environmental protection as part of their culture and as part of their frontline operations,” Barter said.
Once the audit of 5,000 kilometers of Plains pipelines is complete, the NEB will review the results, and if required levy fines or halt operations.
“Ultimately if they are unable to comply with regulations we can shut down their pipeline,” Barter said.
NEB imposed six conditions on Plains including the pipeline audit. The company must also submit documents by Jan. 31 relating to safety and operational controls, and arrange quarterly meetings with NEB staff to report on its management and protection programs.
Plains Midstream Canada was not immediately available for comment.
Editing by David Gregorio