MSC, Costamare settles 2021 Orange County oil spill claim but blames pipeline operator

The MSC Mediterranean Shipping Company says it will settle claims with insurers related to the 2021 Orange County oil spill off southern California after an oil pipeline was damaged by a ship’s anchor.

The settlement was reached with Amplify Energy’s backup insurers, who own and operate the 17-mile San Pedro Bay pipeline that was the source of the spill.

According to MSC, the settlement amount will be funded jointly by MSC and Costamare “without admission of responsibility or liability for the environmental damage caused by Amplify’s negligent management of its subsea pipeline.”

As gCaptain previously reported, Amplify Energy announced over the weekend that it has received necessary federal regulatory approvals to resume operations at the Beta Field off the coast of Southern California following repairs to the pipeline following the 2021 incident.

The pipeline rupture that caused the oil spill is still under investigation, but the US Coast Guard and National Transportation Safety Board (NTSB) believe the pipeline was pulled by a ship’s anchor during a storm on January 25, 2021 – more than 9 months ago the oil spill was discovered. The incident was never reported and the pipeline was not inspected until oil washed up on Southern California beaches in early October 2021.

Divers then discovered that part of the pipeline on the sea floor had been displaced about 100 feet and had a 16-inch crack located about 4.7 miles west of Huntington Beach. two container ships, MSC Danit And Beijingwere named as stakeholders for the first anchor towing incident.

The Beijing owned by Costamare and chartered to China’s COSCO.

The incident came as San Pedro Bay anchorages were packed with ships waiting to enter the ports of Los Angeles and Long Beach amid pandemic-related import surges that have overwhelmed the country’s supply chains and an unprecedented safeguard ahead of ports Southern California created.

In its restart announcement earlier this week, Amplify Energy said the company received $85 million in net proceeds from the ships believed to have hit the pipeline.

Regarding the incident, Amplify Energy pleaded guilty to criminal negligence last year and agreed to pay nearly $13 million in fines after it was found that the company continued operating the pipeline for hours after leak alerts were sounded , and then improperly restarted the pipeline after it was shut down.

MSC’s statement said the company alleges that Amplify is “solely responsible for the events leading up to the oil spill and that its actions have further aggravated the pollution significantly.”

“MSC has agreed to this settlement in order to move productively forward, and we hope this unfortunate incident will encourage Amplify to recognize its responsibility as a vessel operator in California waters,” the statement said.

“Amplify pleaded guilty to criminal negligence for its role in the oil spill. Amplify failed to act as a responsible shipping operator by failing to take adequate preventive measures to better protect its pipeline and identify deficiencies in its pipeline, despite having become aware months before the spill. For these reasons, a preventable pollution event occurred that negatively impacted San Pedro Bay,” the statement added.

Earlier this year, MSC and Costamare agreed to pay Southern California fishermen, tour operators and property owners $45 million to settle a separate legal dispute related to the spill.

The incident remains under investigation by the US Coast Guard and NTSB.

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