# KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 120115008
- **title:** KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2011-10-11
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 194.107(c)(1)(iv), 195.262(b)(1), 195.264(a), 195.310(a), 195.402(c)(3), 195.404(a)(1), 195.404(a)(3), 195.404(c)(3), 195.505(a), 195.589(c).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-120115008.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-120115008
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/120115008
**body:**

Notice of Probable Violation involving KINDER MORGAN LIQUID TERMINALS, LLC. PHMSA's enforcement data identifies the cited regulations as 194.107(c)(1)(iv),  195.262(b)(1),  195.264(a),  195.310(a),  195.402(c)(3),  195.404(a)(1),  195.404(a)(3),  195.404(c)(3),  195.505(a),  195.589(c). The case was opened on 2011-10-11 and is reported as closed as of 2015-08-13. Proposed civil penalty: $41,000. Assessed civil penalty: $41,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

120115008_ NOPV-PCP-PCO_10112011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_%20NOPV-PCP-PCO_10112011.pdf

120115008_ NOPV-PCP-PCO_10112011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_%20NOPV-PCP-PCO_10112011_text.pdf

120115008_Closure Letter_08132015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_Closure%20Letter_08132015.pdf

120115008_Closure Letter_08132015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_Closure%20Letter_08132015_text.pdf

120115008_Consent Agreement and Order_07172013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_Consent%20Agreement%20and%20Order_07172013.pdf

120115008_Consent Agreement and Order_07172013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115008/120115008_Consent%20Agreement%20and%20Order_07172013_text.pdf

120115008_Closure Letter_08132015_text.pdf

U.S. Department Of Transportation Pipeline and 609.989.2171
Hazardous Materials
Safety Administration
820 Bear Tavern Road, Suite 103
West Trenton, NJ 08628
OVERNIGHT EXPRESS DELIVERY
August 13, 2015
Carlos Munguia
Vice President, Operations & Engineering
Kinder Morgan Liquid Terminals, LLC
8500 W. 68th Street
Argo, IL 60501
CPF 1-2011-5008
Dear Mr. Munguia:
On July 17, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued Kinder
Morgan Liquid Terminals, LLC (KMLT) a Consent Agreement and Order (Order) in the above-
referenced case. This Order incorporated the terms of a Consent Agreement signed by both OPS and
KMLT. This Consent Agreement resulted from a Notice of Probable Violation and Proposed Civil
Penalty and Proposed Compliance Order that was issued to KMLT on October 11, 2011.
On May 29, 2015, we received your letter wherein you responded to this Order, and stated that the MOP
substantiation project was completed at Perth Amboy on May 16, 2015.
Subsequently, on June 23, 2015, we received your letter in which you stated that the final work set forth
under Section II of the Order was completed, and you requested that the agreement be terminated. Based
on our review of the documentation you provided within the May 29, 2015 submission, and confirmation
of payment of the civil penalty, it has been determined that you have complied with the terms of this
Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the matters
involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Byron Coy
Director, Easter Region
Pipeline and Hazardous Materials Safety Administration

120115008_Consent Agreement and Order_07172013_text.pdf

U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
__________________________________________
In the Matter of )
Kinder Morgan Liquids Terminals, LLC, ) CPF No. 1-2011-5008
)
)
)
Respondent. )
__________________________________________)
CONSENT AGREEMENT AND ORDER
From May 2008 to December 2010, pursuant to Chapter 601 of 49 United States Code, a
representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of
Pipeline Safety (OPS), conducted on-site inspections of the pipeline facilities of Kinder Morgan
Liquids Terminals, LLC (KMLT or Respondent), at its terminal facilities in Perth Amboy, New
Jersey (Terminal).
Pursuant to the these inspections, the Director, Eastern Region, OPS (Director), issued to Respondent,
by letter dated October 11, 2011, a Notice of Probable Violation and Proposed Civil Penalty, and
Proposed Compliance Order (Notice), a copy of which is attached hereto as Appendix A. In
accordance with 49 C.F.R. § 190.207, the Notice proposed (1) finding that Respondent had
committed various violations of 49 C.F.R. Part 195, (2) assessing a total civil penalty of $41,000 for
two of the alleged violations, and (3) ordering Respondent to take certain measures to correct the
alleged violations. The Notice also included a warning of a probable violation under 49 C.F.R. Part
194 and advised KMLT to take corrective action or face future possible enforcement action.
KMLT responded to the Notice by letter dated October 17, 2011, and requested a hearing, which was
held on November 22, 2011. Subsequent to the hearing, on July 27, 2012, KMLT proposed to resolve
this matter, as well as another enforcement action, CPF No. 1-2011-5009, via an administrative
consent agreement.
Having agreed that settlement of this proceeding will avoid further administrative proceedings or
litigation, pursuant to 49 C.F.R. Part 190, without adjudication of any issue of fact or law, and upon
consent and agreement of Respondent and PHMSA (Parties), the Parties agree as follows:



I. General Provisions.
1. For purposes of this Consent Agreement and Order (Agreement), Respondent acknowledges
that as operator of the Terminal, KMLT and its pipeline system located at the Terminal are subject to
the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. 60101, et seq., and the regulations and
administrative orders issued thereunder.1 As used in this Agreement, the terms “pipeline system” and
“pipeline facility” shall be defined as in 49 C.F.R. Part § 195.2. Respondent acknowledges that it
received proper notice of PHMSA’s action in this proceeding and that the Notice states claims upon
which relief may be granted pursuant to 49 U.S.C. 60101, et seq., and the regulations and orders
issued thereunder.
2. Respondent consents to the issuance of this Agreement, and hereby waives any further
procedural requirements with respect to its issuance. Respondent waives all rights to contest the
adequacy of notice or the validity of the Agreement, including all rights to administrative or judicial
hearings or appeals.
3. This Agreement shall apply to and be binding upon PHMSA, and upon Respondent, its
officers, directors, and employees, and its successors, assigns, or other entities or persons otherwise
bound by law. Respondent agrees to provide a copy of this Agreement, and any incorporated work
plans and schedules, to all of KMLT’s officers, employees, and agents whose duties might reasonably
include compliance with this Agreement.
4. For all transfers of ownership or operating responsibility of Respondent’s pipeline system at
the Terminal, KMLT will provide a copy of this Agreement to the prospective transferee at least 60
business days prior to such transfer and simultaneously provide written notice of the prospective
transfer to the Director and the Associate Administrator for Pipeline Safety, PHMSA, 1200 New
Jersey Avenue, SE, Washington, D.C. 20590.
5. This Agreement constitutes the final, complete and exclusive agreement and understanding
between the Parties with respect to the settlement embodied in this Agreement, and the Parties
acknowledge that there are no representations, agreements or understandings relating to the settlement
other than those expressly contained in this Agreement and its appendices.
6. Nothing in this Agreement affects or relieves KMLT of its responsibility to comply with all
applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101 et seq., and the
regulations and orders issued thereunder. Nothing in this Agreement alters PHMSA’s right of access,
entry, inspection, and information gathering or its authority to bring any enforcement actions against
Respondent pursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder,
or any other provision of Federal or State law.
7. This Agreement does not waive or modify any Federal, State, or local laws or regulations that
1 For a map showing the jurisdictional components of Respondent’s system at the Terminal, see drawings entitled,
“Kinder Morgan Perth Amboy, NJ, Liquids Terminal, Tank Field P&ID’s,” prepared by STV Incorporated, consisting of
41 sheets, dated May 6, 2013 (on file with PHMSA Eastern Region).
- 2 -



are applicable to KMLT or its pipeline systems. This Agreement is not a permit, or a modification of
any permit, under any Federal, State, or local laws or regulations. Respondent remains responsible
for achieving and maintaining compliance with all applicable Federal, State, and local laws,
regulations and permits.
8. This Agreement does not create rights in, or grant any cause of action to, any third party not
party to this Agreement. The U.S. Department of Transportation (DOT) is not liable for any injuries
or damages to persons or property arising from acts or omissions of Respondent or its officers,
employees, or agents carrying out the work required by this Agreement. KMLT agrees to hold
harmless DOT, its officers, employees, agents, and representatives from any and all causes of action
arising from any acts or omissions of Respondent or its contractors in carrying out the work required
by this Agreement.
9. The Parties agree that the facts are as alleged in each item of the Notice and that each item
may be considered by PHMSA to be a prior offense in any future PHMSA enforcement action against
KMLT. This Agreement, however, does not constitute a finding of violation of any Federal law or
regulation and may not be used in any civil proceeding of any kind as evidence or proof of any fact,
fault or liability, or as evidence of the violation of any law, rule, regulation or requirement, except in
a proceeding to enforce the provisions of this Agreement or in future PHMSA enforcement actions.
10. Respondent agrees to complete the corrective actions specified in Section II (Work to be
Performed) of this Agreement and to pay the civil penalties specified in Section III (Civil Penalties).
II. Work to be Performed.
11. KMLT agrees to perform all the corrective actions set forth in the proposed Compliance
Order, as included in the Notice and incorporated herein as part of Appendix A, except for Item 7 (see
Paragraph 12 below), and Item 11 (see Paragraph 13 below).
12. With respect to Item 7 of the proposed Compliance Order, Respondent agrees to perform all
the corrective actions set forth in Appendix B to this Agreement, entitled “Perth Amboy Terminal
MOP Substantiation” (Perth Amboy Project), which is hereby incorporated into this Agreement. The
Perth Amboy Project may be revised to incorporate new information obtained during the evaluations
and remedial activities performed as part of the Perth Amboy Project. Respondent must submit any
proposed Perth Amboy Project revisions to the Director for approval. The Director may approve
proposed revisions, in whole or in part, or may direct KMLT to revise or modify the Perth Amboy
Project as necessary, as set forth in Section III (Review and Approval Process) and Section IV
(Dispute Resolution) below.
13. With respect to Item 11 of the proposed Compliance Order, Respondent agrees to complete
all work within 180 days of the Effective Date of this Agreement, as defined below.
14. The Director may grant an extension of time for completion of any of the work to be
performed under this Section II upon Respondent’s timely, written request that demonstrates both
good cause for an extension and provides sufficient detail to enable the Director to evaluate
- 3 -



Respondent’s request.
III. Review and Approval Process.
15. With respect to any submission under Section II of this Agreement that requires the approval
of the Director, the Director may: (a) approve, in whole or in part, the submission; (b) approve the
submission on specified conditions; (c) disapprove, in whole or in part, the submission; or (d) any
combination of the foregoing. In the event of approval in whole, in part, or upon conditions, KMLT
will proceed to take all actions required by the submission as modified by the Director, subject to
Respondent’s right to invoke procedures in Section IV with respect to any conditions identified by the
Director. In the event the Director does not accept all or any portion of a submission, the Director
will provide KMLT with a written notice of the deficiencies. Respondent will correct all deficiencies
within the time specified by the Director and resubmit it for acceptance. If Respondent fails to
correct the specified deficiencies, the Director may invoke the dispute resolution process provided in
Section IV below.
IV. Dispute Resolution.
16. The Director and Respondent will informally attempt to resolve any disputes arising under
this Agreement. If KMLT and the Director are unable to informally resolve the dispute within 15
business days, Respondent may request in writing, within 10 business days, a written determination
resolving the dispute by the Associate Administrator for Pipeline Safety, PHMSA. Along with its
request, Respondent will provide the Associate Administrator with all information KMLT believes is
relevant to the dispute. If the request is submitted as provided herein, the Associate Administrator
will issue a written determination that shall be final. The existence of a dispute and PHMSA’s
consideration of matters placed in dispute shall not excuse, toll, or suspend any term or timeframe for
completion of any work to be performed under this Agreement during the pendency of the dispute
resolution process, except as agreed by the Director or the Associate Administrator in writing.
V. Enforcement of Agreement and Order.
17. This Agreement, including all plans and schedules incorporated by reference, is subject to all
enforcement authorities available to PHMSA under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part
190, including administrative civil penalties under 49 U.S.C. § 60122 of up to $200,000 per violation
for each day the violation continues and referral of the case to the Attorney General for judicial
enforcement, if PHMSA determines that Respondent is not complying with the terms of the
Agreement, in accordance with determinations made by the Director, or if appealed, in accordance
with decisions of the Associate Administrator. The Perth Amboy Project and all other work plans and
associated schedules developed under Section II shall be automatically incorporated into this
Agreement and are enforceable in the same manner.
VI. Civil Penalties.
18. Within 15 days from the execution of this Agreement, Respondent agrees to pay to the
United States a total civil penalty in the amount of Forty-One Thousand Dollars ($41,000.00), said
- 4 -



amount being assessed by PHMSA for the following alleged violations set forth in the Notice:
a. $20,500, as proposed for Item 11 in the Notice, for the alleged violation of
49 C.F.R. § 195.404(c)(3); and
b. $20,500, as proposed for Item 12 in the Notice, for the alleged violation of
49 C.F.R. § 195.404(c)(3).
19. Payment of the $41,000.00 must be made within 15 days of the Effective Date, as defined
below. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire
transfer through the Federal Reserve Communications System (Fedwire), to the account of the “U.S.
Treasury.” Questions concerning wire transfers should be directed to: Financial Operations Division
(AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P. O. Box
269039, Oklahoma City, Oklahoma 73125. The telephone number of the Division is (405) 954-
8893.
20. Failure to pay the penalty set forth above within 15 days of the Effective Date will result in
the accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717,
31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of
six percent (6%) per annum will be charged if payment is not made within 110 days of service of a
Notice of Late Payment. Furthermore, failure to pay the civil penalty may result in referral of the
matter to the Attorney General for appropriate action in a United States District Court.
VII. Miscellaneous.
21. PHMSA will have the right to inspect the records and facilities of KMLT or any contractor
or agent thereof upon reasonable notice, to confirm that the Perth Amboy Project and other
compliance terms of this Agreement are being undertaken in conformity with the terms of this
Agreement.
22. Except as otherwise provided herein, this Agreement may be modified only by the mutual
agreement of the Parties and set forth in writing and signed by both Parties.
23. Each undersigned representative of the Parties certifies that he is fully authorized by the
party represented to enter into the terms and conditions hereof and to execute and legally bind that
party to it.
VIII. Effective Date and Term.
24. The “Effective Date” as used herein is the date on which this Agreement has been signed by
both KMLT and PHMSA. Unless specified to the contrary, all deadlines for actions required by the
Agreement run from the effective Date of the Agreement.
- 5 -



IX. Termination.
25. This Agreement will terminate upon payment of the full penalty amount set forth in Section
VI (Civil Penalties) and the completion of all terms set forth in Section II (Work to Be Performed), as
26. determined by the Director. Respondent may request, and PHMSA will provide, written
confirmation when this Agreement is terminated. Nothing in this Agreement prevents Respondent
from completing any of the obligations earlier than the deadlines provided for herein.
The Parties hereby agree to all conditions and terms of this Agreement:
For PHMSA: For Kinder Morgan Liquids Terminals, LLC:
___________________________ _____________________________________
Jeffrey D. Wiese Carlos Munguia
Associate Administrator for Vice-President
Pipeline Safety, PHMSA Kinder Morgan Liquids Terminals, LLC
_____________________ _____________________
Date Date
- 6 -



APPENDIX A
[INSERT COPY OF NOPV]



APPENDIX B
[ INSERT COPY OF MOP PROTOCOL ]



Kinder Morgan Liquids Terminals, LLC
PERTH AMBOY PROJECT
Substantiation of Terminal Piping Maximum
Operating Pressure (MOP)
Perth Amboy Terminal, Perth Amboy, NJ



1.0 APPLICABILITY
Refined Products/Natural Gasoline.
2.0 PURPOSE AND SCOPE
This document provides Kinder Morgan Liquids Terminals, LLC (KMLT)
North East Region procedures for establishing and documenting MOP for
each DOT jurisdictional segment of pipe at its terminal facility located in Perth
Amboy, New Jersey (the Perth Amboy Project or Project), as required pursuant
to the Consent Agreement and Order between PHMSA and KMLT regarding
CPF No. 1-2011-5008, dated
The Project includes 22 piping segments, and will involve pressure testing
each jurisdictional segment in order to substantiate MOP in accordance with
the pipeline safety regulations, found at 49 C.F.R. Part 195. The Perth
Amboy Terminal operates under an established MOP of 285 psi, based on
maximum pressure rating of installed flanges. The following procedures and
schedule is designed to substantiate the established MOP in accordance with 49
CFR Part 195. This procedure follows existing KMLT O&M Procedure T-
O&M 1600 (Strength and Leak Testing) (attached), as applicable.
3.0 TESTING PROCEDURES
KMLT will implement the following methods for executing
the Project:
3.1 Identify line segments and internal design pressure
3.1.1 Using Piping and Instrumentation Diagrams (P&IDs),
break down piping systems or segment details, number of
flanges, appurtenances, measurements, etc.
3.1.2 Identify line segments for manageable testing.
3.1.3 Research and document to ensure that all pipe components of the
line segment are capable of the target test pressures. (Refer to test
pressures in 3.3.1)
3.2 Testing Preparation



3.2.3 3.2.5 3.2.1 Develop an air elimination procedure to mitigate risk of air
being injected into tanks and potentially causing floating roof
damage and/or sinking of roofs.
3.2.2 Assemble and issue specifications for piping, valves,
blinds, fitting, flanges, gaskets, studs and nuts, etc.
3.2.3 Secure and/or have on stand-by replacements for piping,
valves, fittings, gauges, gaskets, etc.
Evacuate line segments to appropriate storage tank.
3.2.4 Drain line segments of any residual products to vacuum
trucks and into storage tanks.
Remove and plug all appurtenances on line segments, except
for 1-2 low point drains.
3.2.6 Tag-Out.
Install slip blinds for segments to be tested. Employ Lock-Out
3.2.7 Review contractor pressure test equipment calibration
and verify equipment records.
3.3 Conduct pressure tests2
3.3.1 Conduct pressure tests at 1.25 x 285 psi or 357 psi for four hours
for above- ground pipe and an additional four hours at 1.10 x
285 psi or 314 psi for underground pipe. Pressure test must be
conducted in accordance with §195.304.
Use water as a test medium for each line segment.
Commence pressure test by slowly ramping up pressure in
increments until the test pressure is met. Four hours at 357 psi
and an additional four hours at 314 psi, depending on line
segment. (Refer to calculations in 3.3.1)
3.3.4 Record pressure, ambient temperature and pipe temperature
and monitor pressure changes.
Inspect line segment for leakage for the duration of the test.
3.3.2 3.3.3 3.3.5 2 For a map showing the jurisdictional components of Respondent’s system, see drawings entitled, “Kinder
Morgan Perth Amboy, NJ, Liquids Terminal, Tank Field P&ID’s,” prepared by STV Incorporated, consisting
of 41 sheets, dated May 6, 2013 (on file with PHMSA Eastern Region).



Upon completion, begin system drain of test medium to vacuum
Place test medium in Baker style tanks for reuse in other pipe
3.3.6. retested.
If a leak and/or failure occur, then that line segment must be
3.3.7 Evaluate chart recorder and check that the test meets 49 C.F.R.
Part 195 requirements.
3.4 Completion
3.4.1 trucks.
3.4.2 segments.
3.4.3 Dewater with nitrogen to remove as much water as possible
from low point drains.
3.4.4 Re-install appurtenances on pipe segments, utilizing new
Flexitallic gaskets and new nuts and bolts.
3.4.5 Remove Lock-Out Tag-Out controls and isolation blinds
and return segment back to service.
4.0 TESTING SAFETY
4.1 4.2 4.3 4.4 4.5 Testing procedures should be in place to protect all employees,
contractors, and members of the public, including “essential personnel”
who are or might be in proximity to the facilities undergoing testing.
Maintaining a safe distance for everyone, or providing adequate
barriers or other protections, if necessary to have personnel in the
vicinity of the facilities being tested.
Everyone on site during the test must be informed of the procedures
and a pre- start up safety review must be conducted.
The testing team should also be asked to survey the site to identify and
remove, as appropriate, any loose material that might present a hazard
in the event of failure.
Do not use swell plugs or plumber’s plugs / night caps for
performing pressure tests.
5.0 PROJECT SCHEDULE



KMLT has developed a schedule to complete all jurisdictional segment testing
on the Perth Amboy Terminal by November 1, 2014. This schedule will best
accommodate KMLT’s efforts to conduct the work safely and with minimal
fuel supply disruption to local markets. The following table reflects KMLT’s
projected schedule for segment testing, which will resume in the spring of
2013. Designation and sequencing of specific segments for testing during a
given season will be at KMLT’s discretion and guided by risk assessment
principles. As outlined further below, KMLT will provide periodic progress
reports to PHMSA so that the agency may track implementation of the Perth
Amboy Project. In the first progress report, KMLT will also include
documentation of the segments tested in 2012 for PHMSA’s review.
Proposed Perth Amboy Project Execution Plan
Total Segments 2012
Segments
2013
2014
Segments
Segments
22
Total:
3
Total:
8
Total:
11
6.0 TRAINING
Personnel performing the Project must meet the requirements of the KM
Operator Qualification program.
7.0 DOCUMENTATION
Specific records identified in this section are to be retained in accordance
with T-O&M Procedure 1404, Maps and Records and 49 C.F.R. Part 195.310.
7.1 Test Reporting
Prepare a test report for every pressure test using T-OM1600-01, Pressure Test
Report. This report will be a permanent record and may be used to satisfy
regulatory agencies. Retain the test report for as long as the facility is in use.



Be sure that the data is complete, self-explanatory, and in accordance with 49
C.F.R. 195.310. Attach the following to the test report:
7.1.1 Pressure recording chart signed by the person responsible for
making the test.
7.1.2 Temperature recording chart signed by the person responsible
for making the test.
7.1.3 certification.
Dead weight gauges and pressure recorder calibration
7.1.4 Where elevation difference in the section under test exceeds
100 feet, a profile of the pipeline that shows the elevation and
test sites over the entire length of the test section.
7.1.5 Complete all sections of T-OM1600-01, Pressure Test Report.
If a part of the form is not applicable, insert N/A (not
applicable) so every section is completed. A company
representative must sign all reports.
7.1.6 information:
The “Pressure Test Report” shall contain the following
• Kinder Morgan’s Business Unit’s name.
• The name of the person responsible for making the test (Test
Supervisor).
• The name of the test company used, if any (Test Contractor).
• The date and time of the test.
• The minimum test pressure.
• The test medium.
• A description of the facility tested and the test apparatus.
• A description of any pressure discontinuities, including test
failures and temperature deviations that appear on the pressure
recording charts.



7.2 Additional Testing Reports
In addition to the strength test report, complete the following if
applicable when testing pipeline facilities:
7.2.1 T-OM200-02, Pipeline Inspection/Repair Report distribute as
stated on form.
7.2.2 Retain Survey Notes: Include all pressure test report
numbers in the survey notes. Forward completed notes to the
project management group.
7.3 PHMSA Reporting
PHMSA has requested that KMLT provide progress reports and other
opportunities for information-sharing during implementation of the
Project.
7.3.1 Commencing no more than 90 days after the Effective
Date of the Agreement and continuing every 90 days
thereafter, until the Perth Amboy Project Completion Report,
as described below, has been filed and accepted by PHMSA,
KMLT will submit quarterly progress reports to PHMSA,
describing all work performed during the preceding quarter
and the safety impacts and implications of the Perth
Amboy Project to date. The quarterly reports will include a
segment completion inventory spreadsheet, attached as
Attachment A.
7.3.2 Within 90 days after completion of the Perth Amboy Project.
KMLT will file a Perth Amboy Project Completion Report
with the Director. Said report will contain, at minimum, the
following information:
• A detailed description of the work performed, as implemented;
• The total itemized costs of the work performed; and
• Certification that the works has been implemented
pursuant to the provisions of the Project plan.
• Verification that all jurisdictional assets have been pressure
tested.
7.3.3 All reports, including the Perth Amboy Project Completion
Report, shall be submitted to the Director. As the person
responsible for monitoring Respondent’s compliance with the



terms of this Agreement, the Director may request any
additional documentation, studies, or reports reasonably
necessary to verify compliance with the terms of the
Project plan.



ATTACHMENT A
QUARTERLY PROGRESS REPORT
[DATE]
Kinder Morgan Liquids Terminals, LLC
Terminal Maximum Operating Pressure (MOP) Substantiation Project
PERTH AMBOY TERMINAL, PERTH AMBOY, NJ
Segment
P&ID
Test Pressure
Name
Numbers Test Date Pass / Fail
(psi) Test Medium



ATTACHMENT B
[ INSERT COPY OF KMLT O&M PROCEDURE
T-O&M 1600 (STRENGTH AND LEAK TESTING) ]

120115008_ NOPV-PCP-PCO_10112011_text.pdf

U.S. Department 820 Bear Tavern Road, Suite 103
Of Transportation West Trenton, NJ 08628
Pipeline and 609.989.2171
Hazardous Materials
Safety Administration
NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
OVERNIGHT EXPRESS MAIL
October 11, 2011
David Vattimo
Regional Vice President
Kinder Morgan Liquid Terminals, LLC
8500 West 68th Street
Argo, IL 60501
CPF 1-2011-5008
Dear Mr. Vattimo:
During the months of May 2008 through December 2010, a representative of the Pipeline and Hazardous
Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code conducted
inspections the Kinder Morgan Liquid Terminals, LLC (KM) facility in Perth Amboy, New Jersey.
As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety
Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are:
1. §195.589 What corrosion control information do I have to maintain?
(c) You must maintain a record of each analysis, check, demonstration, examination,
inspection, investigation, review, survey, and test required by this subpart in sufficient
detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist. You must retain these records for at least 5 years,
except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3) and (c)
must be retained for as long as the pipeline remains in service.



120115008
KM failed to maintain records in sufficient detail to demonstrate the adequacy of corrosion
control measures for the replaced line segment from Station 47+59 to 52+69 at the intersection of
State Street and High Street in Perth Amboy, New Jersey.
During the inspection, a PHMSA representative discovered that the subject line segment had been
replaced in the third quarter of 2007. PHMSA representative subsequently requested that KM
personnel provide any and all records that showed the replacement pipe was coated in accordance
with §195.557(a). KM personnel indicated that the subject line segment was coated when
relocated; however, KM could not produce any records or documentation that showed the pipe
was coated.
2. §195.310 Records.
(a) A record must be made of each pressure test required by this subpart, and the record of
the latest test must be retained as long as the facility tested is in use.
KM failed to retain the pressure test record of the replaced pipeline segment from Station 47+59
to 52+69 at the intersection of State Street and High Street in Perth Amboy, New Jersey. The
subject line was in service at the time of the inspection.
According to KM personnel, a section of pipeline at State Street and High Street was replaced
and tied in to an existing pipe. Under §195.308, a pipe associated with a tie-in section must be
pressure tested, either with the section to be tied into or separately. KM could not produce any
records that showed compliance with the requirements prescribed in §195.310.
3. §195.404 Maps and Records.
(a) Each operator shall maintain current maps and records of its pipeline systems
that include at least the following information;
(1) Location and identification of the following pipeline facilities;
(iv) Pipeline valves;
KM failed to maintain current maps and records of the Perth Amboy facility that included
the location and identification of its pipeline valves.
At the time of the inspection, PHMSA requested that KM personnel provide
documentation of its pipeline valves at the Perth Amboy facility. KM had no records or
documentation illustrating all the pipeline valves at the Perth Amboy facilityand KM
personnel confirmed to a PHMSA representative that the current system maps did not
identify pipeline valves.
4. §195.262 Pumping equipment.
(b) The following must be provided in each pump station:
(1) Safety devices that prevent overpressuring of pumping equipment, including the
auxiliary pumping equipment within the pumping station.
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120115008
KM failed to provide safety devices that prevent overpressuring of pumping equipment, including
the auxiliary pumping equipment within the pumping station at the Perth Amboy facility.
During the field inspection, a PHMSA representative observed that no safety devices to prevent
equipment overpressure were installed to protect pump station equipment. KM personnel stated
that overpressure safety devices were not installed and that there was no need for safety devices.
KM personnel did not produce any documentation to substantiate that safety devices were not
required.
5. §195.589 What corrosion control information do I have to maintain?
(c) You must maintain a record of each analysis, check, demonstration, examination,
inspection, investigation, review, survey, and test required by this subpart in sufficient
detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist. You must retain these records for at least 5 years,
except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3) and (c)
must be retained for as long as the pipeline remains in service.
KM failed to maintain records of each atmospheric corrosion inspection required by §195.583(a)
in sufficient detail to demonstrate the adequacy of corrosion control measures.
During the inspection, a PHMSA representative requested that KM personnel provide any and all
atmospheric corrosion inspection records for the Perth Amboy facility. KM personnel could not
produce any documentation relating to atmospheric corrosion inspection.
6. §195.404 Maps and Records.
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained for at
least 2 years or until the next inspection or test is performed, whichever is longer.
Section 195.430(a) requires operators to ensure all firefighting equipment is in proper operating
condition at all times. During the inspection, KM personnel stated that they did not have any
records to show the inspection and testing of firefighting equipment at each pump station and
breakout tank area in the Perth Amboy facility. KM failed to maintain records of each
firefighting equipment inspection and/or test, ensuring that it is in proper operating condition.
7. §195.404 Maps and Records.
(a) Each operator shall maintain current maps and records of its pipeline systems
that include at least the following information;
(3) The maximum operating pressure of each pipeline.
KM failed to maintain current maps and records that included the maximum operating
pressure (MOP) of each of their jurisdictional pipeline segments in or affiliated with the
Perth Amboy facility.
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120115008
At the time of the inspection during the field review, a PHMSA representative requested
that KM personnel provide documentation of the MOP of each pipeline segment. KM
did not have any records or other related documentation demonstrating an established
MOP of each pipeline segment at its Perth Amboy facility.
8. §195.505 Qualification program.
Each operator shall have and follow a written qualification program. The program shall
include provisions to:
(a) Identify covered tasks;
KM failed to identify tank painting or the application of coatings and their repair as a covered
task in its written qualification program. During the field review, it was observed that in-service
breakout tanks 52 and 53 were being sand-blasted and painted by a third-party contractor. A
PHMSA representative requested that KM personnel provide a list of covered tasks performed on
the pipeline facility. KM personnel could not produce any documentation that showed tank
painting or the application of coatings and their repair as a covered task.
9. §195.404 Maps and Records.
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained for at
least 2 years or until the next inspection or test is performed, whichever is longer.
KM failed to maintain records of each breakout tank high level alarm inspection and test required
by §195.428(d) for at least 2 years. In accordance with §195.428(d), overfill protection systems
are required to be inspected and tested. KM could not produce any records of inspection and tests
for each of the breakout tank’s hi-level alarms, which are part of the overfill protection system at
the Perth Amboy facility.
10. §195.404 Maps and Records.
(a) Each operator shall maintain current maps and records of its pipeline systems that
include at least the following information;
(1) Location and identification of the following pipeline facilities;
(i) Breakout tanks;
KM failed to maintain current maps and records of its pipeline systems that include the location
and identification of Department of Transportation (DOT) jurisdictional breakout tanks at the
Perth Amboy facility.
At the time of the inspection, KM personnel provided a copy of a list dated 4/3/2008 that
identified all the DOT breakout tanks at the facility. KM personnel also provided maps and
drawings, all of which were inconsistent with the list. Therefore, the drawings did not accurately
depict the current location and identification of breakout tanks. KM personnel acknowledged that
the maps and drawings were not current.
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120115008
11. §195.404 Maps and Records.
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained for at
least 2 years or until the next inspection or test is performed, whichever is longer.
KM failed to maintain records of forty-four (44) tank thermal relief valve inspections on breakout
tanks required by §195.428(a) for at least 2 years.
During the field inspection, a PHMSA representative observed that each of the twenty-two (22)
breakout tanks had a thermal relief valve at an inlet and an outlet valve totaling forty-four (44)
thermal relief valves. A PHMSA representative requested KM personnel provide any and all
records pertaining to tank thermal relief valves inspection pursuant to §195.428(a). However,
KM personnel could not produce any records of tank thermal relief valve inspections at the time
of the inspection.
12. §195.404 Maps and Records.
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained for at
least 2 years or until the next inspection or test is performed, whichever is longer.
KM failed to maintain records of routine in-service inspections on all atmospheric and low-
pressure steel aboveground breakout tanks required by §195.432(b). Accordingly, API 653
paragraph 6.3.1.2 requires the interval of such inspection be consistent with conditions at the
particular site, but shall not exceed one month . At the time of the inspection, KM could not
produce records of monthly routine in-service inspections.
13. §195.402 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline system a manual of
written procedures for conducting normal operations and maintenance activities and
handling abnormal operatio
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