Sable Offshore Corp. has recently announced a significant change in the regulatory oversight of its Las Flores Pipeline. The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) has concluded that the pipeline is an interstate pipeline, as confirmed by a recent on-site inspection.
Prior to this determination, portions of the Las Flores Pipeline were considered intrastate and were regulated by the California Office of the State Fire Marshal (OSFM) since 2016. However, with this recent evaluation, PHMSA has asserted its exclusive regulatory authority over the pipeline.
The review process included a detailed inspection of the pipeline, its facilities, and written procedures, as well as a review of the 2025 program inspections conducted by OSFM. PHMSA's conclusion is based on factual inquiries and aligns with its policy and interpretation on the delineation between federal and state jurisdiction.
Sable Offshore Corp. acquired the Las Flores Pipeline in 2024, along with other assets, and operates it as a single pipeline system transporting crude oil from the Outer Continental Shelf to the Pentland Station terminal in Kern County, California.
The change in regulatory oversight has significant implications for the company, as it will now be subject to the regulatory requirements and standards prescribed by PHMSA for interstate pipelines. This transition marks a notable shift in the regulatory landscape for Sable Offshore Corp. and its operations.
The company's communication with PHMSA and the subsequent determination of the pipeline's classification highlight the dynamic regulatory environment in the energy and transportation sectors. It underscores the importance of regulatory compliance and the potential impact on operational and financial aspects for companies operating in these industries. Following these announcements, the company's shares moved -2.95%, and are now trading at a price of $5.27. If you want to know more, read the company's complete 8-K report here.
