MAGELLAN TERMINALS HOLDINGS, LP — Warning Letter

120076003w_warning letter_09072007_text.pdf, page 1Official PDFu S Department of Transportation Pipeline and Hazardous Materials Safety Administration 409 3rd Street, SW, Suite 300 Washington, DC 20024 WARNING LETTER CERTIFIED MAIL - RETURN RECEIPT RE UESTED September 7, 2007 Mr Rick A Olson Vice President Pipehne Operations and Technical Services Magellan Terminals Holdings, LP One Wtlhams Center PO Box 22186 MD 28-6 Tulsa, OK 74121-2186 CPF I-2007-6003W Dear Mr Olson Dunng the week of June 11, 2007, a representative of the Pipehne and Hazardous Matenals Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your hquid pipehne and associated breakout tanks in New Haven and Hamden, CT As a result of the inspection, it appears that you have committed a probable violation of the Pipehne Safety Regulations, Title 49, Code of Federal Regulanons The items inspected and the probable violation is#

120076003w_warning letter_09072007_text.pdf, page 21. (1195. 567 Which pipelines must have test leads and what must I do to install and maintain the leads? (a) General. Except for offshore pipelines, each buried or submerged pipeline or segment of pipeline under cathodic protection required by this subpart must have electrical test leads for external corrosion control. However, this requirement does not apply until December 27, 2004 to pipelines or pipeline segments on which test leads were not required by regulations in effect before January 28, 2002. Magellan has 23 test stations to monitor external corrosion on the 2 67 iiule pipehne of which one mile of the pipehne is belowground That one mde of belowground pipehne consists of numerous segments that go below the ground and resurface Magellan monitors for external corrosion at the points where the pipehne enters and leaves the ground The Magellan pipehne was not required to have test leads pnor to January 28, 2002, but has been reqmred by IJ 1 95 567(a) to have test leads by December 27, 2004 With the exception of two test points with leads, the inspector observed Magellan talang pipe to soil readings with the test probe contacting the pipe at coating flaws identified as test stations Repeatedly using the pipe as test points may create a location for the development of atmospheric corrosion Under 49 United States Code, f 60122, you are subiect to a civd penalty not to exceed $100, 000 for each violation for each day the violation persists up to a maximum of $1, 000, 000 for any related series of violations We have reviewed the cucumstances and supporting documents involved in tlus case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this tune We advise you to correct the item identified in this letter Failure to do so will result in Magellan being subiect to additional enforcement action No reply to this letter is required If you choose to reply, in your correspondence please refer to CPF 1-2007-6003W. Be advised that all matenal you submit m response to this enforcement action is subiect to being made pubhcly available If you beheve that any portion of your responsive material quahfies for confidential treatment under 5 U S C 552(b), along with the complete ongtnal document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you beheve the redacted information quahfies for confidential treatment under 5 U S C 552(b)#

120076003w_warning letter_09072007_text.pdf, page 3Sincerely, Byron Coy, PE Director, Eastern Region Pipehne and Hazardous Materials Safety Adnurustratron#