U.S. regulator orders inquiry, repairs after Sunoco's Permian leak

HOUSTON (Reuters) - Federal regulators on Wednesday issued a Corrective Action Order to Sunoco Logistics requiring it to examine and fix its Permian Express II pipeline in central Texas after it leaked 800 barrels of oil on Sept. 10, according to a notice.

A segment of the 200,000 barrels-per-day pipeline will remain shut until regulators authorize a written restart plan, the Pipeline and Hazardous Materials Safety Administration (PHMSA) said.

The company must submit a remedial work plan within 45 days of receiving the results of metallurgical tests, regulators said.

The incident comes just months after regulators issued Sunoco a “Notice of Probable Violation,” and proposed a $1.3 million fine for welding practices used during the construction of the Permian Express II, including the use of unqualified welders.

Sunoco in May contested the regulator’s claims and requested a hearing.

The cause of last weekend’s incident is not yet known, but in a notice issued to the company, regulators said the leak appears to be in the vicinity of a girth weld.

The pipeline, which began service in mid-2015, moves crude from the Permian Basin to Corsicana, Texas, where it can connect to the U.S. Gulf Coast. The spill occurred about 2 miles (3.2 km) southeast of Sweetwater, Texas.

A spokesman for the company did not immediately respond to a request for comment.

Reporting by Liz Hampton; Editing by Alan Crosby