Safety regulators have quietly placed two extra conditions on construction of TransCanada Corp.’s (TSX:TRP) Keystone XL oil pipeline after learning of potentially dangerous defects involving the southern leg of the Canada-to-Texas project.
The defects — high rates of bad welds, dented pipe and damaged pipeline coating — have been fixed. But the federal Pipeline and Hazardous Materials Safety Administration wants to make sure similar problems don’t occur during construction of the pipeline’s controversial northern segment, which is on hold pending a decision by the Obama administration.
One condition requires TransCanada to hire a third-party contractor chosen by the pipeline safety agency to monitor the construction and make reports to the safety administration on whether the work is sound.
The second requires TransCanada to adopt a quality management program to ensure “this pipeline is — from the beginning — built to the highest standards by both Keystone personnel and its many contractors.”
The conditions are buried near the end of the 26 appendices in a voluminous environmental impact statement on Keystone XL released by the State Department on Jan. 31.
Most of Appendix Z is devoted to 57 well-known “special conditions” that TransCanada agreed to three years ago. But conditions 58 and 59 are listed on an additional page.
U.S. quietly imposes new conditions on Keystone pipeline construction - The Globe and Mail