Oil report

Pennsylvania prosecutor opens criminal investigation of Mariner East pipe

Dec 20 (Reuters) - Chester County District Attorney Tom Hogan opened a criminal investigation into Energy Transfer LP’s construction of the Mariner East natural gas liquids pipelines in Pennsylvania.

“We have seen sinkholes created by the pipeline drilling, contaminated well water and some subtle and not-so-subtle bullying of Chester County citizens by big corporate interests,” Hogan said in a release on Wednesday.

This is the latest in a long series of legal and regulatory actions against Energy Transfer over construction of the Mariner East 2 pipeline.

“We vehemently deny any such wrongdoing and we take issue with the many factual inaccuracies contained in the District Attorney’s press release,” Energy Transfer said in a statement on Thursday, saying the company looked forward to opening a dialogue with the District Attorney’s Office.

Mariner East transports liquids from the Marcellus and Utica shale fields in western Pennsylvania to customers in the state and elsewhere, including international exports from Energy Transfer’s Marcus Hook complex near Philadelphia.

Energy Transfer started work on a $2.5 billion expansion of the project in February 2017 and had planned to finish the new 350-mile (563-kilometer) pipeline in the third quarter of 2017.

But completion has been delayed by several work stoppages by state agencies due to permit violations and other problems, including release of drilling fluids into waterways and discovery of sinkholes.

Energy Transfer has said it expects to put Mariner East 2 into service by the end of the year. The pipe crosses Chester County in the southeast part of the state.

In addition to accusing the company of criminal wrongdoing, Hogan said the governor and state agencies have not done enough to police Energy Transfer’s construction of Mariner East.

“We expected the state regulators and the governor to step in and assure the safety of Pennsylvanians. They have not,” Hogan said, so “now the Chester County District Attorney’s Office will demand that every aspect of these pipelines be conducted safely.”

In response, the Pennsylvania Department of Environmental Protection (DEP) said it has issued more than 80 notices for permit violations and collected more than $13 million in penalties.

“The commonwealth is living up to our promise to hold this project accountable,” the DEP said.

Hogan said potential charges included causing or risking a catastrophe, criminal mischief and environmental crimes, which could result in criminal charges against workers on the pipeline and corporate officers.

Reporting by Scott DiSavino; Editing by Cynthia Osterman