KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation

120185004_NOPV-PCP-PCO_01182018.pdf, page 1Official PDFU.S. Department of Transportation 820 Bear Tavern Road, Suite 103 West Trenton, NJ 08628 Pipeline and 609.771.7800 Hazardous Materials Safety Administration NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS DELIVERY January 18, 2018 Joshua Etzel Vice President - Operations & Engineering Kinder Morgan Liquid Terminals, LLC 78 Lafayette Street Carteret, NJ 07008 CPF 1-2018-5004 Dear Mr. Etzel: From July 27-31, 2015, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code inspected Kinder Morgan Liquid Terminals, LLC's (KMLT) pipeline terminal in Perth Amboy, New Jersey. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s) are: 1. § 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... KMLT did not retain a record of each pressure test required by this subpart. Specifically, KMLT failed to retain pressure test records for 9 breakout tanks at its Perth Amboy, NJ facility, as per § 195.310. In 2007, KMLT constructed 9 new breakout tanks. These tanks, numbered 52 through 60, required hydrostatic testing, per API Standard 650 "Welded Steel Tanks for Oil Storage" 11th Edition, incorporated by reference in § 195.3(b)(18).#

120185004_NOPV-PCP-PCO_01182018.pdf, page 2CPF 1-2018-5004 During the inspection, the PHMSA inspector requested hydrostatic test records for the breakout tanks. KMLT provided a "Settlement Elevation Plan and Graph" for each breakout tank that required a hydrostatic test and stated that, "the settlement surveys were the only records relevant to the 2007 hydrostatic tests of the 9 breakout tanks." In email correspondence following the inspection, KMT responded to PHMSA's exit interview questions in an email dated September 10, 2015, stating, "Have aboveground breakout tanks been pressure tested to their corresponding API or ASME Standard or Specification, and do pressure test records contain the required information? - BOT pressure test records are missing due to the devastation caused by Hurricane Sandy (construction, inspection, repair and alteration records have been lost/destroyed and could not be provided during the inspection)." Thus, KMLT failed to maintain documentation as required by § 195.310(a). 2. § 195.420 Valve Maintenance (b) Each operator shall, at intervals not exceeding 7½ months, but at least twice each calendar year, inspect each mainline valve to determine that it is functioning properly. KMLT failed to inspect its mainline valves at intervals not exceeding 7½ months, but at least twice each calendar year. During the inspection, the PHMSA inspector reviewed KMLT's mainline valve inspection records for the Perth Amboy, New Jersey facility. The Mainline Valve Inspection records indicated that mainline valve inspections for Mainline Valve 001 - MOV at Motiva and Mainline Valve 002 - MOV at Buckeye Outbound were inspected on: a. February 21, 2014 b. September 26, 2014 c. July 23, 2015 The interval between mainline valve inspections conducted on September 26, 2014 and July 23, 2015, exceeded the 7½ month requirement by 73 days. Thus, KMLT failed to inspect its mainline valves at intervals not exceeding 7½ months, but at least twice each calendar year. 3. § 195.573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodie protection required by this subpart complies with Sec. 195.571: (1) Conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. However, if tests at those intervals are impractical for separately protected short sections of bare or ineffectively coated pipelines, testing may be done at least once every 3 calendar years, but with intervals not exceeding 39 months. KMLT failed to conduct tests on its protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. 120185004_NOPV-PCP-PCO_01182018 (150080) Page 2 of 6#

120185004_NOPV-PCP-PCO_01182018.pdf, page 3CPF 1-2018-5004 During the inspection, the PHMSA inspector reviewed KMLT's structure pipe to soil inspection records from 2012 through 2015. The records showed that in 24 instances, KMLT conducted tests on protected pipelines that were not bare or ineffectively coated, but the interval between structure pipe to soil inspections conducted on August 27, 2013 and December 15-19, 2014, exceeded 15 months by 18-22 days. Additionally, in 7 instances, from 2013-2015, KMLT failed to take any structure pipe to soil readings. The PHMSA inspector asked KMLT why there were missing test reads and KMLT was unable to provide a reason. Thus, KMLT failed to conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. 4. § 195.575 Which facilities must I electrically isolate and what inspections, tests, and safeguards are required? (c) You must inspect and electrically test each electrical isolation to assure the isolation is adequate. KMLT failed to inspect and electrically test each electrical isolation to assure the isolation is adequate. During the inspection, the PHMSA inspector reviewed KMLT's casing pipe to soil inspection records from calendar years 2012 through 2015, and KMLT's T-O&M 903 - External Corrosion Control for Buried or Submerged Pipelines and Above Ground Tanks, revised 10/05/12. Section 1.8 of the procedure stated in part, "Test electrical isolation by comparing the casing-to-soil potentials to the matching pipe-to-soil potentials at least once each calendar year, not to exceed 15 months..." In subsequent follow-ups to the inspection, PHMSA and KMLT exchanged emails from August 27, 2015 through September 8, 2015 regarding cathodic protection records. In those emails, KMLT stated in part that: "I have attached a spreadsheet to correlate the readings to the alignment sheets. We are missing some casing readings for 2012 and 2014, and are still trying to locate the readings for 2013, however, have not been able to find them thus far..." "Yes, it can be confirmed that under the "CPDM Reading Taken" column for 2012 to 2014 PANJ 1201 pipeline, where the rows are blank the Casing Test Lead data is missing..." KMLT was missing 14 casing P/S (casing pipe to soil) test reads from 2013-2014. Additionally, the intervals between 10 casing pipe to soil inspections conducted on August 27, 2013 and December 15-19, 2014, exceeded 15 months by 18-22 days. Thus, KMLT failed to inspect and electrically test each electrical isolation to assure the isolation is adequate. 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), 120185004_NOPV-PCP-PCO_01182018 (150080) Page 3 of 6#

120185004_NOPV-PCP-PCO_01182018.pdf, page 4CPF 1-2018-5004 and 195.579(b)(3) and (c) must be retained for as long as the pipeline remains in service. KMLT failed to 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. Specifically, KMLT failed to maintain records of inspections of cathodic protection systems used to control corrosion on the bottom of 8 aboveground breakout tanks #2, #3, #5, #7, #10, #11, #17, and #18, to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651, as per § 195.573(d). During for 2012-204. The PHIM inspector reviesed aboris protection jaspe in er ion" cathodic protection systems. KMLT could not provide 2013 inspection records. Therefore, KMLT failed to maintain records of inspections of the cathodic protection system for 8 breakout tanks for 2013. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $209,002 per violation per day the violation persists, up to a maximum of $2,090,022 for a related series of violations. For violations occurring prior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $208,600 as follows: Item number PENALTY 2 3 $33,300 $74,700 $72,800 5 $27,800 Proposed Compliance Order With respect to item 1, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Kinder Morgan Liquid Terminals, LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with 120185004_NOPV-PCP-PCO_01182018 (150080) Page 4 of 6#

120185004_NOPV-PCP-PCO_01182018.pdf, page 5CPF 1-2018-5004 the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. Please submit all correspondence in this matter to Robert Burrough, Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, West Trenton, New Jersey 08628. Please refer to CPF 1-2018-5004 on each document you submit, and whenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed to robert.burrough@dot.gov. Larger files should be sent on a CD accompanied by the original paper copy to the Eastern Region Office. Additionally, if you choose to respond to this (or any other case), please ensure that any response letter pertains solely to one CPF case number Sincerely, Nut Bunk Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosure: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120185004_NOPV-PCP-PCO_01182018 (150080) Page 5 of 6#

120185004_NOPV-PCP-PCO_01182018.pdf, page 6CPF 1-2018-5004 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Kinder Morgan Liquid Terminals, LLC (KMLT) a Compliance Order incorporating the following remedial requirements to ensure the compliance of KMLT with the pipeline safety regulations: 1. In regard to Item 1 of the Notice, pertaining to KMLT's failure to retain a record of each pressure test as per § 195.310(b), KMLT must: a. Assemble existing hydrostatic test records for breakout tanks #52-60. The records must be held as surrogate records for missing hydrostatic test records. The surrogate records must include specific info about the hurricane event, impact to site, and efforts to recover the damaged records. b. All documentation demonstrating compliance with PCO item la above must be submitted to the Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Road, Suite 103, West Trenton, NJ 08628 for review within 60 days of receipt of the Final Order. 2. It is requested (not mandated) that KMT maintains documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Robert Burrough, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. 120185004_NOPV-PCP-PCO_01182018 (150080) Page 6 of 6#

120185004_Closure Letter_11052019_text.pdf, page 1Official PDFOVERNIGHT EXPRESS DELIVERY November 5, 2019 Joshua Etzel Vice President – Operations & Engineering Kinder Morgan Liquid Terminals, LLC 78 Lafayette Street Carteret, NJ 07008 CPF 1-2018-5004 Dear Mr. Etzel: On June 27, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Kinder Morgan Liquid Terminals, LLC (KMLT) a Final Order (Order) in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided 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, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration#

120185004_Final Order_06272019_text.pdf, page 1Official PDFJune 27, 2019 Ms. Kimberly Allen Dang President Kinder Morgan, Inc. 1001 Louisiana Street, Suite 1000 Houston, Texas 77002 Re: CPF No. 1-2018-5004 Dear Ms. Dang: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, Kinder Morgan Liquid Terminals, LLC. It makes findings of violation, assesses a civil penalty of $208,600, and specifies actions that need to be taken by Kinder Morgan to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the modified compliance order completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order is effective as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA Mr. Steven Kean, Chief Executive Officer, Kinder Morgan, Inc. Mr. Joshua Etzel, Vice President – Operations, Northeast Region, Kinder Morgan Liquid Terminals, LLC, 78 Lafayette Street, Carteret, New Jersey 07008 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120185004_Final Order_06272019_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ____________________________________ In the Matter of ) Kinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2018-5004 a subsidiary of Kinder Morgan, Inc., ) ) ) ) Respondent. ) ____________________________________) FINAL ORDER From July 27 through 31, 2015, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Kinder Morgan Liquid Terminals, LLC (KMLT or Respondent), a subsidiary of Kinder Morgan, Inc., in Perth Amboy, New Jersey. The Perth Amboy Terminal includes 113 tanks, with a total storage capacity of more than 3.5 million barrels.1 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated January 18, 2018, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that KMLT had committed five violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $208,600 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct one of the alleged violations. After requesting and receiving an extension of time, KMLT responded to the Notice by letter dated February 28, 2018 (Response). The company contested one of the allegations, requested that two items be changed to warning items, that it be granted additional time to complete the proposed compliance order, and that the proposed civil penalty be reduced. Respondent did not request a hearing and therefore has waived its right to one. The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.310(a), which states: FINDINGS OF VIOLATION 1 https://www kindermorgan.com/content/docs/terminalbrochures/ne_PerthAmboy.pdf (last accessed September 27, 2018).#

120185004_Final Order_06272019_text.pdf, page 3CPF No. 1-2018-5004 Page 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. The Notice alleged that Respondent violated 49 C.F.R. § 195.310(a) by failing to make a record of each pressure test required by Subpart E of Part 195 and to retain such records as long as the facility tested is in use. Specifically, the Notice alleged that KMLT failed to retain pressure-test records for nine breakout tanks located at KMLT’s Perth Amboy facility. In its Response, KMLT stated that Item 1 should be withdrawn because the hydrostatic tank- testing documentation provided to PHMSA met the testing and recordkeeping requirements in place at the time the tanks were constructed in 2007. KMLT stated that certain “Settlement Elevation Plan and Graph” documents provided to PHMSA during the inspection show that KMLT complied with the requirements in the 10th edition of [American Petroleum Institute (API)] Standard 650, which KMLT correctly noted is the applicable edition of the API Standard in this case since the 10th edition was incorporated into the pipeline safety regulations at the time the tanks were constructed. KMLT also contended that the documents provided to PHMSA during the inspection showed that the company had completed hydrostatic testing requirements pursuant to Part 195, Subpart E, and § 195.307. Finally, KMLT stated that additional documentation associated with the construction and hydrostatic testing of these tanks had been lost due to the destruction caused by Hurricane Sandy in 2012. Section 195.310(a) requires operators to make a record of all pressure tests required by Subpart E and to retain such records as long as the facility tested is in use. Section 195.307(c) in Subpart E contains the requirements for hydrostatic testing of aboveground breakout tanks. During the PHMSA inspection, KMLT provided certain “Settlement Elevation Plan and Graph” documents for each breakout tank to show compliance with the recordkeeping requirement of § 195.310; however, a review of these documents shows that they do not reflect information supporting the performance of hydrostatic tests conducted in accordance with § 195.307. On the contrary, the documents provide only certain measurements of elevation and tank settlement. Further, KMLT did not provide new or relevant records with its Response supporting the performance of hydrostatic tests on the nine subject tanks, as required by § 195.307(c). It is clear that KMLT was unable to provide records of the pressure tests required by Subpart E or at least to retain them as long as the Perth Amboy facility is in use, as required by § 195.310(a). Respondent’s contention that the documentation was lost due to Hurricane Sandy does not abrogate or eliminate the violation, but is relevant to the terms of the proposed compliance order. Therefore, this issue is addressed more fully in the “Compliance Order” section below. Accordingly, after considering all of the evidence and the issues presented, I find that Respondent violated 49 C.F.R. § 195.310(a) by failing to make a record of each pressure test required by Subpart E of Part 195 and to retain such records as long as the facility tested is in use. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.420(b), which states:#

120185004_Final Order_06272019_text.pdf, page 4CPF No. 1-2018-5004 Page 3 § 195.420 Valve maintenance. (a) . . . . (b) Each operator shall, at intervals not exceeding 7½ months, but at least twice each calendar year, inspect each mainline valve to determine that it is functioning properly. The Notice alleged that Respondent violated 49 C.F.R. § 195.420(b) by failing to inspect, at intervals not exceeding 7½ months but at least twice each calendar year, each mainline valve to determine that it is functioning properly. Specifically, the Notice alleged that KMLT performed mainline-valve inspections on its “Mainline Valve 001 – MOV” at Motiva and its “Mainline Valve 002 – MOV” at Buckeye on February 21, 2014, September 26, 2014, and July 23, 2015. According to the Notice, the interval between the September 26, 2014 and July 23, 2015 inspections exceeded the maximum allowable inspection interval by 73 days. In its Response, KMLT did not contest this allegation of violation, but requested that the Item be converted to a warning item. KMLT admitted that the valve inspections were not performed on a timely basis, but stated that the inspections revealed the valves were in working order and that there were no unsafe conditions. Because § 195.420(b) specifically requires mainline valve inspections to occur at least twice a year but not exceeding 7½ months, and because the evidence demonstrates that the valve inspections were not performed according to that schedule, I find this Item should remain a violation and not converted to a warning item. Since KMLT’s argument for this Item also pertains to potential mitigation of the proposed penalty, this argument is addressed specifically in the section below, “Assessment of Penalty.” Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.420(b) by failing to inspect, at intervals not exceeding 7½ months but at least twice each calendar year, each mainline valve to determine that it is functioning properly. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states: § 195.573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodic protection required by this subpart complies with § 195.571: (1) Conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. However, if tests at those intervals are impractical for separately protected short sections of bare or ineffectively coated pipelines, testing may be done at least once every 3 calendar years, but with intervals not exceeding 39 months. The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct tests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. Specifically, the Notice alleged that KMLT conducted tests on certain pipe at the Perth Amboy facility that was not bare or ineffectively coated, at intervals exceeding 15 months by up to 22 days on 24 separate occasions. The Notice also alleged that KMLT did not perform any pipe-to-soil readings from 2013 to 2015 on seven separate occasions.#

120185004_Final Order_06272019_text.pdf, page 5CPF No. 1-2018-5004 Page 4 In its Response, KMLT did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct tests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. PHMSA alleged that its inspector had asked KMLT why there were missing test records and KMLT was unable to provide a reason. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c), which states: § 195.575 Which facilities must I electrically isolate and what inspections, tests, and safeguards are required? (a) . . . . (c) You must inspect and electrically test each electrical isolation to assure the isolation is adequate. The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and electrically test each electrical isolation to assure the isolation is adequate. Specifically, the Notice alleged that KMLT could not produce records of 14 casing pipe-to-soil test readings that should have occurred in 2013 and 2014 at the Perth Amboy facility to ensure electrical isolations were adequate. In its Response, KMLT did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and electrically test each electrical isolation to assure the isolation is adequate. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c), which states: § 195.589 What corrosion control information do I have to maintain? (a) . . . . (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 §§ 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. The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c) by failing to maintain a record of each analysis, check, demonstration, examination, inspection, investigation, review, survey, and test required by Subpart H in sufficient detail to demonstrate the adequacy of corrosion-control measures or that corrosion requiring control measures does not exist. Specifically, the Notice alleged that KMLT did not maintain records of inspections required by § 195.573(d), under Subpart H, for at least five years. Section 195.573(d) states: “You must inspect each cathodic protection system used to control corrosion on the bottom of an aboveground breakout tank to ensure that operation and maintenance of the system are in accordance with API RP 651.” The Notice alleged KMLT did not maintain 2013 inspection records of the cathodic-protection system used to control corrosion on the bottom of eight#

120185004_Final Order_06272019_text.pdf, page 6CPF No. 1-2018-5004 Page 5 aboveground breakout tanks. In its Response, KMLT did not contest this allegation of violation, but requested that the Item be reduced to a warning item. KMLT argued that pipeline safety was minimally affected by the violation, that new corrosion control personnel had been hired since the time of the violation, and that new training was being implemented to train employees on achieving compliance. Respondent also stated that it now utilizes a new electronic document-management system to better maintain documents. Since these arguments relate to the severity of the violation and potential mitigation of the proposed penalty, they will be addressed in the section below, “Assessment of Penalty.” Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.589(c) by failing to maintain a record of each analysis, check, demonstration, examination, inspection, investigation, review, survey, and test required by Subpart H in sufficient detail to demonstrate the adequacy of corrosion-control measures or that corrosion requiring control measures does not exist. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.2 In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $208,600 for the violations cited above. Item 2: The Notice proposed a civil penalty of $33,300 for Respondent’s violation of 49 C.F.R. § 195.420(b), for failing to inspect each mainline valve at intervals not exceeding 7½ months, but at least twice each calendar year, to determine that it is functioning properly. Respondent argued that if this Item were not converted to a warning item, then the penalty should be withdrawn or reduced. Respondent admitted the valve inspections were not timely performed, but argued that when the inspections were eventually performed, the valves were in good working order and that there were no safety or integrity conditions present. Respondent also stated that the company subsequently re-trained company personnel on the proper inspection intervals. 2 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).#

120185004_Final Order_06272019_text.pdf, page 7CPF No. 1-2018-5004 Page 6 With respect to the nature, circumstances and gravity of the violation, the Violation Report alleged that PHMSA (and not KMLT) discovered the violation, that the violation concerned a failure to perform an activity, but that pipeline safety was “minimally affected.”3 KMLT argued that the valves were in good working order and there were no safety or integrity issues present. I have reviewed the Violation Report and find that it appropriately classified the gravity of the violation as minimally impacting safety and therefore the proposed penalty had already taken the account the lowest level of gravity. Accordingly, no reduction is warranted based on the information Respondent provided. With respect to culpability, the Violation Report alleged that KMLT failed to take appropriate action to comply with a requirement that was clearly applicable. 4 Respondent argued that it re- trained personnel on the inspection-interval requirements after the PHMSA inspection. KMLT’s post-inspection corrective actions are commendable and duly noted, but do not constitute grounds to reduce the penalty because they were taken after PHMSA had already identified the violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $33,300 for violation of 49 C.F.R. § 195.420(b). Item 3: The Notice proposed a civil penalty of $74,700 for Respondent’s violation of 49 C.F.R. § 195.573(a)(1), for failing to conduct tests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. KMLT did not contest this violation, but argued that the penalty should be withdrawn or reduced because once its inspections were performed, no unsafe conditions were discovered and that the violation was “akin to a missing records violation.” Respondent also argued that the penalty should be reduced because the company had since hired a new cathodic-protection team lead who were fully versed in the regulatory requirements. Further, KMLT argued that the company had placed test sites more closely together than was required by its procedures. Finally, Respondent contended that three of the test stations had actually been removed from service prior to 2013, which explained why those readings were not included in the company’s records.5 With respect to the nature, circumstances and gravity of the violation, the Violation Report alleged that PHMSA had discovered the violation, that the violation involved a failure to perform an activity, and that pipeline safety or integrity was compromised in a High Consequence Area (HCA),6 or in an HCA “could affect” segment.7 KMLT argued that the penalty should be withdrawn or reduced because once the inspections were performed, no unsafe conditions were 3 Violation Report, at 14-16. 4 Id., at 17. 5 Response, at 7-8. 6 See 49 C.F.R. § 195.450 for a definition of “High Consequence Area.” 7 Violation Report, at 21-23.#

120185004_Final Order_06272019_text.pdf, page 8CPF No. 1-2018-5004 Page 7 discovered and that the violation was akin to a records violation. I disagree. Monitoring of cathodic-protection systems is an important component of pipeline safety. Missed or delayed testing is not akin to a records violation. Rather, the company’s records show that various tests were conducted late or not at all, which is a failure to conduct activities necessary to ensure the integrity of a pipeline facility. With respect to gravity, the allegation that pipeline safety or integrity was compromised in an HCA is supported by the record. Respondent’s failure to test protected pipelines compromised safety because corrosion was not being monitored in environmentally sensitive HCAs, for periods up to two years. With respect to culpability, the Violation Report alleged that KMLT failed to take appropriate action to comply with a requirement that was clearly applicable. 8 While it is prudent to hire experienced personnel who are well-versed in the pipeline-safety regulations, such actions do not constitute grounds to reduce the penalty since they were taken after PHMSA had already identified the violation. Further, the distance between test sites is not at issue in this case; rather, the frequency of the tests performed is the central requirement of § 195.573(a)(1). Even if there were test sites that went beyond those that were required, the record does not show that tests were run in additional locations on a schedule that would show corrosion was being monitored at the frequency required by the regulation. Additionally, Respondent has not provided evidence that any test-site locations were actually removed from service during the relevant inspection period. Therefore, I do not find there is any basis for withdrawing or reducing the penalty based on the gravity of the violation, KMLT’s culpability, prior offenses, or good faith in attempting to comply. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $74,700 for violation of 49 C.F.R. § 195.573(a)(1). Item 4: The Notice proposed a civil penalty of $72,800 for Respondent’s violation of 49 C.F.R. § 195.575(c), for failing to inspect and electrically test each electrical isolation to assure the isolation is adequate. KMLT did not contest this violation, but argued that the penalty should be reduced because pipeline safety was minimally affected and because Respondent had subsequently hired new personnel and revised its procedures. With respect to the nature, circumstances and gravity of the violation, the Violation Report alleged that PHMSA had discovered the violation, that the violation involved a failure to perform an activity, and that pipeline safety or integrity was compromised in an HCA or in an HCA “could affect” segment.9 KMLT argued that the penalty should be withdrawn or reduced because safety was minimally affected. I do not agree. Electrical isolation is an essential component of effective cathodic protection. Shorted casings can lead to pipeline failures, and the record shows that Respondent either conducted its testing late or not at all to ensure there were no shorted casings. 8 Id., at 24. 9 Id., at 28-30.#

120185004_Final Order_06272019_text.pdf, page 9CPF No. 1-2018-5004 Page 8 KMLT’s post-inspection corrective actions are commendable and duly noted, but do not constitute grounds to reduce the penalty because they were taken after PHMSA had already identified the violation. While it was necessary and prudent for KMLT to amend its procedures to comply with the regulations and to hire and train employees fully versed in the pipeline safety regulations, such actions do not warrant a penalty reduction for a violation that occurred before such changes were implemented. Therefore, I do not find there is any basis for withdrawing or reducing the penalty based on the gravity of the violation, Respondent’s culpability, prior offenses, or good faith in attempting to comply. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $72,800 for violation of 49 C.F.R. § 195.575(c). Item 5: The Notice proposed a civil penalty of $27,800 for Respondent’s violation of 49 C.F.R. § 195.589(c), for failing to maintain a record of each analysis, check, demonstration, examination, inspection, investigation, review, survey, and test required by Subpart H in sufficient detail to demonstrate the adequacy of corrosion-control measures or that corrosion requiring control measures does not exist. KMLT argued that if Item 5 were not reduced to a warning item, then the penalty for the Item should be reduced or withdrawn. Respondent did not contest the violation, but argued that pipeline safety was minimally affected. KMLT also stated that new corrosion-control personnel had been hired since the violation occurred and that new training was being implemented to train employees on achieving compliance going forward. Respondent also stated it now utilized a new electronic document-management system to better maintain its documents. With respect to the nature, circumstances and gravity of the violation, the Violation Report alleged that PHMSA discovered the violation, that the violation concerned missing, inaccurate or incomplete records, but that pipeline safety had been “minimally affected.”10 Respondent argued for a reduction in the penalty because there were no safety or integrity issues present. I have reviewed the Violation Report and find that it appropriately classified the gravity of the violation as minimally impacting safety and therefore the proposed penalty had already taken the account the lowest possible level of gravity. Accordingly, no reduction is warranted based on the information KMLT provided. Again, Respondent’s post-inspection corrective actions are commendable and duly noted, but do not constitute grounds to reduce the penalty because they were taken after PHMSA had already identified the violation. Therefore, I do not find there is any basis for withdrawing or reducing the penalty based on the gravity of the violation, KMLT’s culpability, prior offenses, or good faith in attempting to comply. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $27,800 for violation of 49 C.F.R. § 195.589(c). In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $208,600. 10 Id., at 35-37.#

120185004_Final Order_06272019_text.pdf, page 10CPF No. 1-2018-5004 Page 9 Payment of the civil penalty must be made within 20 days of service. 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. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $208,600 civil penalty will result in 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. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49 C.F.R. § 195.310(a). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. With regard to the violation of § 195.310(a) (Item 1), KMLT requested that if Item 1 were not withdrawn, that the proposed compliance order should be revised to allow an additional 60 days (for a total of 120 days) to complete the actions. I find such revision to be appropriate. Accordingly, the terms of the compliance order are modified as set forth below. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, KMLT is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.310(a) (Item 1), KMLT must: a. b. Assemble existing hydrostatic test records for breakout tanks numbered 52 through 60. The records must be held as surrogate records for missing hydrostatic test records. The surrogate records must include specific information about the hurricane event, impact to the site, and efforts to recover the damaged records. All documentation demonstrating compliance with this item must be submitted to the Director, Eastern Region, within 120 days of receipt of the Final Order. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension.#

120185004_Final Order_06272019_text.pdf, page 11CPF No. 1-2018-5004 Page 10 It is requested (not mandated) that KMLT maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. It is further requested that these costs be reported in two categories: (1) total cost associated with preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with replacements, additions and other changes to pipeline infrastructure. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. The other terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. June 27, 2019 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

120185004_NOPV PCP PCO_01182018_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS DELIVERY January 18, 2018 Joshua Etzel Vice President – Operations & Engineering Kinder Morgan Liquid Terminals, LLC 78 Lafayette Street Carteret, NJ 07008 CPF 1-2018-5004 Dear Mr. Etzel: From July 27-31, 2015, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code inspected Kinder Morgan Liquid Terminals, LLC’s (KMLT) pipeline terminal in Perth Amboy, New Jersey. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s) are: 1. § 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… KMLT did not retain a record of each pressure test required by this subpart. Specifically, KMLT failed to retain pressure test records for 9 breakout tanks at its Perth Amboy, NJ facility, as per § 195.310. In 2007, KMLT constructed 9 new breakout tanks. These tanks, numbered 52 through 60, required hydrostatic testing, per API Standard 650 “Welded Steel Tanks for Oil Storage” 11th Edition, incorporated by reference in § 195.3(b)(18).#

120185004_NOPV PCP PCO_01182018_text.pdf, page 2CPF 1-2018-5004 During the inspection, the PHMSA inspector requested hydrostatic test records for the breakout tanks. KMLT provided a “Settlement Elevation Plan and Graph” for each breakout tank that required a hydrostatic test and stated that, “the settlement surveys were the only records relevant to the 2007 hydrostatic tests of the 9 breakout tanks.” In email correspondence following the inspection, KMLT responded to PHMSA’s exit interview questions in an email dated September 10, 2015, stating, “Have aboveground breakout tanks been pressure tested to their corresponding API or ASME Standard or Specification, and do pressure test records contain the required information? - BOT pressure test records are missing due to the devastation caused by Hurricane Sandy (construction, inspection, repair and alteration records have been lost/destroyed and could not be provided during the inspection).” Thus, KMLT failed to maintain documentation as required by § 195.310(a). 2. § 195.420 Valve Maintenance (b) Each operator shall, at intervals not exceeding 7½ months, but at least twice each calendar year, inspect each mainline valve to determine that it is functioning properly. KMLT failed to inspect its mainline valves at intervals not exceeding 7½ months, but at least twice each calendar year. During the inspection, the PHMSA inspector reviewed KMLT’s mainline valve inspection records for the Perth Amboy, New Jersey facility. The Mainline Valve Inspection records indicated that mainline valve inspections for Mainline Valve 001 – MOV at Motiva and Mainline Valve 002 – MOV at Buckeye Outbound were inspected on: a. February 21, 2014 b. September 26, 2014 c. July 23, 2015 The interval between mainline valve inspections conducted on September 26, 2014 and July 23, 2015, exceeded the 7½ month requirement by 73 days. Thus, KMLT failed to inspect its mainline valves at intervals not exceeding 7½ months, but at least twice each calendar year. 3. § 195.573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodic protection required by this subpart complies with Sec. 195.571: (1) Conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. However, if tests at those intervals are impractical for separately protected short sections of bare or ineffectively coated pipelines, testing may be done at least once every 3 calendar years, but with intervals not exceeding 39 months. KMLT failed to conduct tests on its protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. 120185004_NOPV PCP PCO_01182018_text Page 2 of 6#

120185004_NOPV PCP PCO_01182018_text.pdf, page 3CPF 1-2018-5004 During the inspection, the PHMSA inspector reviewed KMLT’s structure pipe to soil inspection records from 2012 through 2015. The records showed that in 24 instances, KMLT conducted tests on protected pipelines that were not bare or ineffectively coated, but the interval between structure pipe to soil inspections conducted on August 27, 2013 and December 15-19, 2014, exceeded 15 months by 18-22 days. Additionally, in 7 instances, from 2013-2015, KMLT failed to take any structure pipe to soil readings. The PHMSA inspector asked KMLT why there were missing test reads and KMLT was unable to provide a reason. Thus, KMLT failed to conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. 4. § 195.575 Which facilities must I electrically isolate and what inspections, tests, and safeguards are required? (c) You must inspect and electrically test each electrical isolation to assure the isolation is adequate. KMLT failed to inspect and electrically test each electrical isolation to assure the isolation is adequate. During the inspection, the PHMSA inspector reviewed KMLT’s casing pipe to soil inspection records from calendar years 2012 through 2015, and KMLT’s T-O&M 903 – External Corrosion Control for Buried or Submerged Pipelines and Above Ground Tanks, revised 10/05/12. Section 1.8 of the procedure stated in part, “Test electrical isolation by comparing the casing-to-soil potentials to the matching pipe-to-soil potentials at least once each calendar year, not to exceed 15 months…” In subsequent follow-ups to the inspection, PHMSA and KMLT exchanged emails from August 27, 2015 through September 8, 2015 regarding cathodic protection records. In those emails, KMLT stated in part that: “I have attached a spreadsheet to correlate the readings to the alignment sheets. We are missing some casing readings for 2012 and 2014, and are still trying to locate the readings for 2013, however, have not been able to find them thus far…” “Yes, it can be confirmed that under the “CPDM Reading Taken” column for 2012 to 2014 PANJ 1201 pipeline, where the rows are blank the Casing Test Lead data is missing…” KMLT was missing 14 casing P/S (casing pipe to soil) test reads from 2013-2014. Additionally, the intervals between 10 casing pipe to soil inspections conducted on August 27, 2013 and December 15-19, 2014, exceeded 15 months by 18-22 days. Thus, KMLT failed to inspect and electrically test each electrical isolation to assure the isolation is adequate. 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), 120185004_NOPV PCP PCO_01182018_text Page 3 of 6#

120185004_NOPV PCP PCO_01182018_text.pdf, page 4CPF 1-2018-5004 and 195.579(b)(3) and (c) must be retained for as long as the pipeline remains in service. KMLT failed to 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. Specifically, KMLT failed to maintain records of inspections of cathodic protection systems used to control corrosion on the bottom of 8 aboveground breakout tanks #2, #3, #5, #7, #10, #11, #17, and #18, to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651, as per § 195.573(d). During the inspection, the PHMSA inspector reviewed cathodic protection “Tanks Inspection” records for 2012-2014. The PHMSA Inspector requested records to document inspection of tank cathodic protection systems. KMLT could not provide 2013 inspection records. Therefore, KMLT failed to maintain records of inspections of the cathodic protection system for 8 breakout tanks for 2013. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $209,002 per violation per day the violation persists, up to a maximum of $2,090,022 for a related series of violations. For violations occurring prior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $208,600 as follows: Item number PENALTY 2 $33,300 3 $74,700 4 $72,800 5 $27,800 Proposed Compliance Order With respect to item 1, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Kinder Morgan Liquid Terminals, LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with 120185004_NOPV PCP PCO_01182018_text Page 4 of 6#

120185004_NOPV PCP PCO_01182018_text.pdf, page 5CPF 1-2018-5004 the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. Please submit all correspondence in this matter to Robert Burrough, Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, West Trenton, New Jersey 08628. Please refer to CPF 1-2018-5004 on each document you submit, and whenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed to robert.burrough@dot.gov. Larger files should be sent on a CD accompanied by the original paper copy to the Eastern Region Office. Additionally, if you choose to respond to this (or any other case), please ensure that any response letter pertains solely to one CPF case number. Sincerely, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosure: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120185004_NOPV PCP PCO_01182018_text Page 5 of 6#

120185004_NOPV PCP PCO_01182018_text.pdf, page 6CPF 1-2018-5004 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Kinder Morgan Liquid Terminals, LLC (KMLT) a Compliance Order incorporating the following remedial requirements to ensure the compliance of KMLT with the pipeline safety regulations: 1. In regard to Item 1 of the Notice, pertaining to KMLT’s failure to retain a record of each pressure test as per § 195.310(b), KMLT must: a. Assemble existing hydrostatic test records for breakout tanks #52-60. The records must be held as surrogate records for missing hydrostatic test records. The surrogate records must include specific info about the hurricane event, impact to site, and efforts to recover the damaged records. b. All documentation demonstrating compliance with PCO item 1a above must be submitted to the Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Road, Suite 103, West Trenton, NJ 08628 for review within 60 days of receipt of the Final Order. 2. It is requested (not mandated) that KMLT maintains documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Robert Burrough, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. 120185004_NOPV PCP PCO_01182018_text Page 6 of 6#