HOUSTON – Midstream energy company Plains All American Pipeline LP (NYSE: PAA) has reached a settlement agreement with the US Environmental Protection Agency (EPA) and the US Department of Justice (DOJ) regarding 10 oil spills that occurred between 2004 and 2007.

Once approved by the US District Court for the Southern District of Texas, the Consent Decree, which calls for the Houston-based master limited partnership to pay a $3.25 million civil penalty, upgrade more than 10,000 miles of US pipeline at a cost of nearly $41 million, and adhere to certain operational procedures and restrictions, becomes effective.

The agreement comes after more than four years of negotiation, during which, according to the company’s Annual Reports on Form 10-K filed with the SEC, the company has already integrated many of the operational requirements contained in the decree into its operating practices.

According to the EPA, the 10 spills – most caused by pipeline corrosion – ranged in size from 2.5 barrels to 4,500 barrels. A 2004 crude oil release reached the Pecos River, while a 2005 crude oil release reached the Sabine River.

Overall, the EPA estimates more than 273,000 barrels of crude oil were spilled from various pipelines and one tank owned and operated by the company. The 10 spills ranged in size from 2.5 barrels to 4,500 barrels and most were caused by pipeline corrosion, the EPA noted.

The full amount of the cash settlement was included in PAA's contingency accruals at June 30, 2010. The penalty will be added to the federal Oil Spill Liability Trust Fund.

PAA is engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products.