A gas pipeline experienced a series of events where saboteurs detonated explosives that damaged it and its associated facilities, causing numerous pipeline outages and associated force majeure claims. Baker & O’Brien was retained to provide an independent and objective assessment of whether the repair durations met the standard of a reasonable and prudent operator. Our consultants testified in four arbitration hearings providing expert opinions based on our review of the force majeure events.

A large (36-inch diameter) operating gas pipeline experienced a series of events where saboteurs detonated explosives that damaged it and its associated facilities, causing numerous pipeline outages and associated force majeure claims. Baker & O’Brien was engaged to review each force majeure event and determine whether the pipeline operator’s repair durations were reasonable.

Natural gas pipelines require routine, regularly scheduled maintenance and inspections to address the normal wear and tear associated with their operation. They may also incur unscheduled outages to repair unexpected damage or capacity impairments. Reasonable pipeline operators must consider several commercial factors when planning pipeline repairs, including:

• restoring service in a manner that minimizes financial impacts to the operator and its customers
• completing temporary repairs in an expedient (but not unduly expensive or burdensome) manner
• planning for emergencies with written response plans and procedures and having spare parts on hand to cover such eventualities
• providing adequate security for repair crews where required

To determine whether the operator took all reasonable steps to repair the pipeline and its facilities, Baker & O’Brien examined the actual repair progress as set out in contemporaneous reports. We then estimated appropriate repair times by: 1) preparing repair schematics to determine key repair steps; 2) generating man-hour estimates for key repair steps; 3) developing a critical path schedule; and 4) applying industry labor productivity factors that accounted for local conditions.

Baker & O’Brien submitted expert reports containing our findings for each force majeure event. We also prepared and submitted observations and opinions regarding opposing experts’ reports. Our consultants testified in four separate arbitration hearings.