The U.S. Justice Department said on Friday it had filed a proposed settlement with the owner and operator of the Keystone oil pipeline to resolve Clean Water Act violations related to a 2022 rupture in Kansas.

Keystone ships Canadian crude from Alberta to the U.S. Midwest and on to the Gulf Coast, and is a key part of Canada’s oil export network.

In December 2022, the pipeline spilled about 14,000 barrels of oil into a creek in Washington County, Kansas, the biggest U.S. oil spill in nine years. A resulting probe concluded the pipeline ruptured due to a crack in a weld, which progressed due to pressure and temperature “fatigue.”

In the settlement, South Bow SOBO.TO, the Canadian company that owns and operates the pipeline, agreed to pay a civil penalty of more than $26 million and complete work designed to prevent future similar discharges, which the company estimates will cost $40 million, according to the U.S. Justice Department.

South Bow also agreed to contribute over $3 million to Kansas for natural resource restoration projects to resolve violations of Kansas state laws, the department said.

(Reporting by Bhargav Acharya, Katharine Jackson; Editing by Doina Chiacu and David Ljunggren)

Topics USA Kansas