U.S. fines BP $7 million for natgas transport violations

WASHINGTON (Reuters) - BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) was fined $7 million by the U.S. Federal Energy Regulatory Commission late on Thursday for violations of agency rules related to interstate natural gas pipeline and storage facilities.

FERC's penalty comes on top of $373 million in fines and restitution the British oil giant agreed to pay other U.S. regulators on Thursday for a deadly explosion at BP's Texas City oil refinery, oil spills on its Alaska pipeline and manipulation of the U.S. propane market.

In the FERC case, the violations involved thousands of individual transactions in 2005 and 2006 related to BP's management of customers' rights to ship and store natural gas.

FERC said the most serious violation was a practice known as "flipping," which was carried out by evading agency regulations that required posting and competitive bidding for discounted long-term releases of pipeline capacity.

BP illegally arranged for short-term releases of discounted pipeline capacity to two company-affiliated replacement shippers on alternating months for 22 months.

FERC said all of BP violations involved 49.3 billion cubic feet of gas and occurred on 14 major pipeline systems.

In addition to the penalty, BP will implement a compliance monitoring plan for at least one year under FERC supervision.