Regulators tell Plains to Purge Shut California Oil Pipeline

U.S. pipeline regulators have ordered Plains All American Pipeline LP to purge a California pipeline system of crude to prevent corrosion after a separate pipeline ruptured and fouled Santa Barbara County shores last May.

The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) said Plains must purge oil from Line 903, a 130-mile (209 km), pipeline that runs from Gaviota, California inland to Kern County. Plains also must purge three shut offshore oil pipelines operated by Freeport McMoRan that normally feed Line 903.

PHMSA said surveys have shown that Line 903 has "similar corrosion characteristics" as Line 901, which ruptured and spilled up to 3,400 barrels of crude in mid-May, fouling Santa Barbara County shores as well as wildlife.

Line 901 has been shut and empty since the spill, and the damaged section was excavated and removed shortly thereafter. Line 903, also shut, has been "full of crude oil" since late May except for a section that operates intermittently at lower pressures, PHMSA said.

PHMSA said in the order made public on Friday that the crude could contain corrosive elements and must be purged to head off another potential breach.

Plains has no estimate of when the lines will restart, according to regulatory filings. The company cannot restart them without PHMSA's approval.

PHMSA, as well as the U.S. Environmental Protection Agency, the U.S. Department of Justice and California state and county agencies are investigating the spill.

Plains has estimated that spill-related costs could reach $257 million, including fines, settlements and cleanup. That amount does not include lost revenue from the shutdowns, the company said in a quarterly filing with regulators.

Line 901 moved crude produced in Exxon Mobil Corp's Santa Ynez offshore oilfield from Las Flores north along the California coastline to Gaviota. Line 903 moved oil from Freeport McMorRan's Point Arguello offshore inland.

(Reporting by Kristen Hays; Editing by James Dalgleish)