Energy Firm Fined $250K for Security Problems at Liq. Natural Gas Facility

Dec. 10--The state has fined KeySpan $250,000 for alleged security breaches when two people broke into its liquefied natural gas storage facility in Lynn last summer.

Five days elapsed before the energy firm discovered and reported the intrusion last August, raising fears about the facility's vulnerability to terrorist attack. Company officials explained that no one had reviewed the surveillance tape, which captured the intruders using wire cutters to cut through a fence and climbing on top of the storage tank.

The state Department of Telecommunications and Energy on Friday cited KeySpan for alleged security violations and ordered the company to beef up its monitoring to prevent future break-ins. The company is not allowed to pass on the cost of the fine to ratepayers.

Alleged violations include not adequately maintaining the Lynn plant's security system and portions of surrounding enclosures, not conducting security patrols required under its own procedures, and not consistently training employees on security procedures.

KeySpan officials said in a statement that the company is reviewing the state order. The company has already upgraded its monitoring and other security system procedures based on the recommendations of safety specialists it hired after the intrusion.

"KeySpan will continue the process of intermediate and long-term additional enhancements to our site in Lynn and all of our facilities to ensure that an incident such as this does not take place again," Nick Stavropoulos , president of KeySpan Energy Delivery, said in a statement.

KeySpan operates nine LNG storage facilities in Massachusetts. The Lynn tank, built in 1971, holds more than 12,000 gallons of super-cooled liquefied natural gas, which turns into a transparent and flammable gas if released.

While there was no evidence the intruders were terrorists and no damage was done to the tanks, the breach raised questions of perimeter security and surveillance monitoring. Private firms that run LNG facilities are responsible for developing a security plan, which are reviewed by the Department of Telecommunications and Energy.

The state's investigation of the Lynn facility included an inspection of its physical plant, KeySpan's security plans and systems, as well as employee training records.

"The LNG plants in Massachusetts are an important and vital part of the state's gas supply system," Janice S. Tatarka , director of the Office of Consumer Affairs and Business Regulation, which oversees the DTE, said in a statement. "They must have in place rigorous security practices and procedures to safeguard their facilities against intruders so that they can continue to function safely with uninterrupted service to their customers."

Under state regulations, KeySpan had 30 days to respond to the allegations by either agreeing to pay the fine or requesting a hearing before the department.

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