Lion Oil Sues for $80 Million Claim After Pipeline Rupture

by Arkansas Business Staff  on Monday, Oct. 14, 2013 12:00 am  

An oil pipeline rupture in April 2012 in Louisiana has cost Lion Oil Co. of Brentwood, Tenn., more than $80 million at its oil refinery in El Dorado.

Lion last week sued several insurance carriers for breach of contract for denying its claims to recover the money.

Lion has operated the refinery in El Dorado since 1985. It relied on a pipeline that was run by ExxonMobil Pipeline Co. to deliver the crude oil, according to its lawsuit filed in U.S. District Court for the Western District of Arkansas.

When the pipeline broke near Torbert, La., ExxonMobil shut the line down. Oil didn’t start flowing through the line for almost 11 months.

Lion Oil said it had an “all risk” insurance policy with its various insurance carriers, including National Union Fire Insurance Co. of Pittsburgh and Great Lakes Reinsurance UK PLC.

Lion Oil “was able to avoid a complete shut-down of its refinery, meet its contractual obligations with most of its customers, maintain its skilled workforce and reduce the amount of its losses,” it said in the lawsuit. Still, it suffered $44 million in lost earnings and had $36 million in spill-related expenses.

The claims Lion filed with its insurance carriers were denied, so Lion is now suing for the money plus other costs.

As of Thursday, the insurance carriers hadn’t filed their response to the lawsuit.



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