{"operation":"document","citation":"CPF 120132001","title":"NEPTUNE LNG, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-01-24","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.605(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120132001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120132001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120132001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120132001","body":"Notice of Probable Violation involving NEPTUNE LNG, LLC. PHMSA's enforcement data identifies the cited regulation as 192.605(a). The case was opened on 2013-01-24 and is reported as closed as of 2014-01-15. Proposed civil penalty: $13,700. Assessed civil penalty: $13,700. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120132001_Final Order_12262013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_Final%20Order_12262013.pdf\n\n120132001_Final Order_12262013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_Final%20Order_12262013_text.pdf\n\n120132001_NOPV_PCP_01242013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_NOPV_PCP_01242013.pdf\n\n120132001_NOPV_PCP_01242013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_NOPV_PCP_01242013_text.pdf\n\n120132001_Operator Response and Time Extension_02212013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_Operator%20Response%20and%20Time%20Extension_02212013.pdf\n\n120132001_Operator Response Notice_03082013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120132001/120132001_Operator%20Response%20Notice_03082013.pdf\n\n120132001_Final Order_12262013_text.pdf\n\nDECEMBER 26, 2013\nMr. Zin Smati\nPresident and CEO\nGDF SUEZ Energy North America\n1990 Post Oak Boulevard, Suite 1900\nHouston, Texas 77056-3831\nRe: CPF No. 1-2013-2001\nDear Mr. Smati:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $13,700. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Gary S. Williams, Director, Port Operations, Neptune LNG, LLC\nMr. Frank Katulak, Senior Vice President, Operations, Neptune LNG, LLC\nMr. Byron Coy, Director, Eastern Region, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nNeptune LNG, LLC, and )\nGDF SUEZ Energy North America, ) CPF No. 1-2013-2001\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nDuring the week of August 15, 2011, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Neptune\nLNG, LLC (Neptune or Respondent), in Gloucester, Massachusetts. Neptune is a subsidiary of\nGDF SUEZ Energy North America.\n1 Neptune operates 13.5 miles of pipeline transporting\nnatural gas associated with its deepwater port operation located off the coast of Gloucester,\nMassachusetts.\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated January 24, 2013, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Neptune had\nviolated 49 C.F.R. § 192.605(a) and proposed assessing a civil penalty of $13,700 for the alleged\nviolation.\nNeptune responded to the Notice by letter dated March 8, 2013 (Response). The company\ncontested the allegation, offered additional information in response to the Notice, and requested\nthat the proposed civil penalty be eliminated. Respondent did not request a hearing and therefore\nhas waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a), which states:\n1 The Notice of Probable Violation in this case was issued to Neptune LNG, LLC.\n\n\n\n2\n§ 192.605(a) -- Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline,\na manual of written procedures for conducting operations and maintenance\nactivities and for emergency response. For transmission lines, the manual\nmust also include procedures for handling abnormal operations. This\nmanual must be reviewed and updated by the operator at intervals not\nexceeding 15 months, but at least once each calendar year. This manual\nmust be prepared before operations of a pipeline system commence.\nAppropriate parts of the manual must be kept at locations where\noperations and maintenance activities are conducted.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.605(a) by failing to follow its\nmanual of written procedures for conducting operations and maintenance activities. Specifically,\nthe Notice alleged that Neptune’s procedures required it to verify the electrical isolation of its\ndeepwater port from the Algonquin Hubline by July 10, 2011, and that Neptune failed to do so.\nIn its Response, Neptune contended that it had complied with its procedures. Neptune asserted\nthat its procedure on electrical isolation states:\n“On the Neptune pipeline, an electrical isolation gasket kit is installed on the 20”\nball valve flange-to-flange connecting the 20”/16” reducer spool to electrically\nisolate the Algonquin Hub Line hot tap and the Transition Manifold. Inspection\nand electrical tests must be made to assure that electrical isolation is adequate,\nonce each calendar year not exceeding 15 month interval. Arrangements will be\nmade with Spectra annually to obtain readings from the Spectra side of the hot\ntap.”2\nNeptune stated that initial testing was performed prior to the commissioning date of\nApril 10, 2010, and that for calendar year 2011, it completed its own tests in June 2011 and\nreceived Spectra’s reading on August 22, 2011. Neptune asserted that the procedure requires the\ncompany to “make its readings which will be used to confirm electrical isolation within its 15-\nmonth interval, and to obtain readings separately from Spectra on an annual basis.” Neptune\nstated that because it did conduct its inspection and electrical test within the 15-month interval,\nand that because it obtained an annual reading from Spectra for Spectra’s side of the hot tap, it\nhad not violated its procedure.\nI disagree. Neptune’s procedure states that “[i]nspection and electrical tests must be made to\nassure that electrical isolation is adequate, once each calendar year not exceeding 15 month\ninterval [sic].” The procedure does not specify that only Neptune’s tests must be completed\nwithin the 15-month interval. In order to assure that electrical isolation is adequate, the readings\nfrom both the Neptune side and the Spectra side of the hot tap are required. Because Neptune\ncould not verify that the electrical isolation was adequate until receiving the test results from\nSpectra, and because August 22, 2011, was more than 16 months after the initial testing, Neptune\nfailed to meet the 15-month deadline.\n2 Response at 2.\n\n\n\n3\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.605(a) by failing to follow its written procedures for electrical isolation verification.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $13,700 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $13,700 for Respondent’s violation of 49 C.F.R.\n§ 192.605(a), for failing to follow its manual of written procedures for conducting operations and\nmaintenance activities. In its Response, Neptune requested that the proposed penalty be\neliminated or reduced. Neptune’s only argument for this reduction was the same as its defense to\nthe alleged violation. As discussed above, however, I did not find that argument persuasive. The\npurpose of electrical isolation is to ensure the pipeline can be adequately protected from external\ncorrosion which, if left unchecked, can lead to a pipeline failure. Neptune was fully culpable for\nthe failure to ensure that the electrical isolation on its pipeline was adequate. Therefore, I find\nthat the nature, circumstances, and gravity of the violation justify the proposed penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $13,700 for violation of 49 C.F.R. § 192.605(a).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $13,700.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $13,700 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\n\n\n\n4\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":12159}