Cavern operator hit with sixth lawsuit in sinkhole dispute

Crosstex Energy Services LP has sued the operator of a failed salt dome cavern suspected of causing a 15.1-acre sinkhole last year in Assumption Parish and forcing the permanent closure of a Crosstex natural gas pipeline.

Filed April 22 in the 23rd Judicial District Court in Assumption, the lawsuit claims cavern operator Texas Brine Co. of Houston knew or should have known the salt dome cavern was defective and alleges the resulting harm could have been prevented.

The suit seeking damages is the sixth filed in state and federal courts over the growing swampland sinkhole between the Bayou Corne and Grand Bayou communities.

Crosstex became the first among several companies operating caverns in the Napoleonville Dome to bring suit against Texas Brine. Other suits filed so far have been brought by evacuated residents or owners of large tracts near the sinkhole.

The cavern in dispute was permitted in 1982 and shut in 2011. The sinkhole emerged in early August after a few months of tremors and mysterious gas bubbles in area bayous.

Crosstex, a Dallas-based midstream pipeline company, alleges the sinkhole rendered its 36-inch “St. James to Weeks Island” natural gas pipeline unusable and the line must be relocated.

Crosstex also claims the cavern failure prevented facility expansion and led to the loss of storage contracts for its two salt dome caverns near Texas Brine’s cavern.

Crosstex used its caverns to store liquefied petroleum gas moving from production fields to consumers. Texas Brine uses salt dome caverns to create brine for the petrochemical industry.

Frank Neuner Jr., Crosstex attorney, said Tuesday the company has been in negotiations with Texas Brine but filed the suit to protect Crosstex’s legal rights.

“We wanted to start the legal interest running since we’re incurring substantial cost
to relocate the line,” Neuner said.

Crosstex officials have said in previous public statements that the pipeline closure costs $275,000 per month. Neuner said the initial estimate for the pipeline relocation is $25 million to $30 million.

Sonny Cranch, Texas Brine spokesman, said Wednesday, the suit, “like all other filings, will be reviewed by our legal counsel, who will respond appropriately.”

Other defendants are Texas Brine insurers Zurich American Insurance Co., American Guarantee and Liability Insurance Co. and Arch Specialty Insurance Co.

Occidental Chemical Corp. is the cavern property owner, the suit says, but is not a defendant, as Texas Brine is the operator.

Scientists working for the Louisiana Office of Conservation have said the failed cavern, known as Oxy Geismar No. 3, was mined too close to the Napoleonville Dome’s outer face and developed a sidewall breach, triggering the sinkhole and related impacts.

Crosstex’s suit touches on this theory.

“By allowing brine mining operations to breach the edge of the salt formation, Texas Brine failed to comply with applicable safety regulations,” the suit alleges.

Conservation officials have said that the kind of cavern failure that occurred is unprecedented. State regulations do not limit how closely caverns can be mined to the salt dome face, but regulators say rules of thumb exist for safe distances.