Albuquerque, NM- El Paso Natural Gas Co. agreed Thursday to pay a $15.5 million fine and make $86 million in pipeline modifications in a settlement after a fiery explosion killed 12 campers in August 2000.

The Justice Department and the Pipeline and Hazardous Materials Safety Administration said the settlement covers the company’s 10,000-mile pipeline system across the West, Southwest and northern Mexico.

Federal investigators determined the explosion – which left a crater 20 feet deep – was caused by water and other corrosives that pooled in the 50-year-old pipe and ate away at the metal.

Among other things, the settlement agreement requires the company to modify its pipelines so they can be inspected by machines placed inside the lines to measure the thickness of pipes; collect and analyze liquid samples to measure how corrosive they are; and train corrosion control workers.

The changes “will help to ensure that severe internal corrosion that resulted in such a tragic accident will not be repeated,” said Ronald J. Tenpas of the Justice Department’s environment and natural resources division, one of the attorneys signing the settlement.

El Paso Natural Gas already has spent more than $225 million on pipeline integrity and will spend more under the decree, said Richard Wheatley, manager of media relations for parent company El Paso Corp. (nyse: EP – news – people )

“The industry and El Paso have learned a lot from the Carlsbad incident. … We’re actively participating in industry initiatives to improve pipeline safety,” he said.

The company did not admit to any of the allegations in the federal complaint. Wheatley said the company believes it was in compliance with regulations in effect at the time of the explosion.

El Paso Natural Gas and its parent company have settled negligence lawsuits filed by relatives of those killed in the explosion, the last settlement in 2002. The amounts of the settlements were not disclosed, except for $14 million paid to the wife and son of one of the victims.

Five young children were among the victims near Carlsbad, all of whom were members of an extended family.

The consent decree, filed in U.S. District Court in Albuquerque, is the first judicial settlement brought under the Pipeline Safety Act, the Justice Department said.