Federal investigators found a leak on a natural gas pipeline next to one of the two buildings in New York City destroyed in an explosion that killed eight people last week.

The 8-inch main pipeline, parts of which are 120 years-old, failed a pressure test, the National Transportation Safety Board said in a statement yesterday. Segments of service pipelines found in the basements of the buildings have been removed and will be shipped to the NTSB lab in Washington for further investigation.

The failed test is the “first solid evidence” that a gas leak from a Consolidated Edison Inc. (ED:US) pipe probably caused the explosion, Kit Konolige, a New York-based analyst for BGC Partners LP, wrote today in a note to clients. That “puts the spotlight” on the utility’s inspection and maintenance of the line, he wrote. Konolige rates the shares at hold and owns none.

“The leak is a potential cause of the accident and something investigators will be looking at,” said Brigham McCown, an industry consultant and former acting administrator of the Pipeline and Hazardous Materials Safety Administration. “It suggests a path for natural gas to potentially escape and pool,” he said in a telephone interview yesterday.

Investigators and other regulators are zeroing in on pipe age and condition as a possible cause, McCown said. It’s possible that the explosion could have weakened the gas pipe or created the leak, he said.

“We’ve known for some time we have aging infrastructure,” he said. “Cast iron pipe is really old and utilities have embarked on replacing it.”

It’s too early to say if Con Edison was responsible for the leak in the main pipeline, said Samya Lutz, outreach coordinator for the Pipeline Safety Trust, a watchdog group. Main lines can be damaged by a variety of causes, she said. The NTSB statement also doesn’t clarify whether the leak is in a cast iron or plastic segment of the line. Regulators have been pressing utilities to replace cast iron, which has been implicated in leaks, with plastic, she said.


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