Exxon Pegasus Pipeline Shutdown Kept in Place by U.S. Regulator

Restrictions on Exxon Mobil Corp. (XOM)’s Pegasus crude oil pipeline, shut since March 29 after a spill, remain in place after the company requested changes in a hearing held on May 2, according to a filing from federal regulators.

Exxon told the U.S. Pipeline and Hazardous Materials Safety Administration that a 211-mile (340-kilometer) southern section of the pipeline presented less risk because it was constructed more recently than the northern leg that spilled about 5,000 barrels of oil near Mayflower, Arkansas.

The regulators pointed out at the hearing that the newer section, built in 1954, and had a seam failure during a prior hydrostatic test, according to a decision from Jeffrey Wiese, associate administrator for pipeline safety. The corrective action order preventing the line’s restart was kept in place, with modifications to future limitations on pressure.

On April 30, Exxon found a second leak on Pegasus in Doniphan, Missouri. The shutdown of the line, which delivers about 96,000 barrels a day to Gulf Coast refineries from Patoka, Illinois, helped back up oil supplies in the central U.S. Exxon hasn’t provided a timeline for restarting Pegasus or filed a plan with federal regulators to return it to service.

To contact the reporter on this story: Eliot Caroom in New York at ecaroom@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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