{"operation":"document","citation":"CPF 12020009NOPSO","title":"UGI ENERGY SERVICES — Safety Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":"2020-09-04","effective_on":null,"summary":"OPEN safety order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020009nopso.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020009nopso.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020009nopso","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12020009NOPSO","body":"Safety Order involving UGI ENERGY SERVICES. The dataset does not identify a cited regulation for this case. The case was opened on 2020-09-04 and is reported as open. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12020009NOPSO_Consent Agreement and Order_08162021_(20-187254).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Consent%20Agreement%20and%20Order_08162021_(20-187254).pdf\n\n12020009NOPSO_Consent Agreement and Order_08162021_(20-187254)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Consent%20Agreement%20and%20Order_08162021_(20-187254)_text.pdf\n\n12020009NOPSO_Notice of Proposed Safety Order_09042020_(20-187254).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Notice%20of%20Proposed%20Safety%20Order_09042020_(20-187254).pdf\n\n12020009NOPSO_Notice of Proposed Safety Order_09042020_(20-187254)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Notice%20of%20Proposed%20Safety%20Order_09042020_(20-187254)_text.pdf\n\n12020009NOPSO_Operator Post-Hearing Submission_06112021_(20-187254).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Operator%20Post-Hearing%20Submission_06112021_(20-187254).pdf\n\n12020009NOPSO_Operator Request for Hearing_01192021_(20-187254).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_Operator%20Request%20for%20Hearing_01192021_(20-187254).pdf\n\n12020009NOPSO_PHC Hearing Scheduled_02022021_(20-187254).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_PHC%20Hearing%20Scheduled_02022021_(20-187254).pdf\n\n12020009NOPSO_PHC Hearing Scheduled_02022021_(20-187254)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020009NOPSO/12020009NOPSO_PHC%20Hearing%20Scheduled_02022021_(20-187254)_text.pdf\n\n12020009NOPSO_PHC Hearing Scheduled_02022021_(20-187254)_text.pdf\n\nFebruary 2, 2021\nVIA ELECTRONIC MAIL TO: kcoyle@babstcalland.com and robert.burrough@dot.gov\nMr. Keith Coyle, Esq.\nCounsel for UGI Energy Services\nBabst Calland\n505 9th Street NW, Suite 700\nWashington, DC 20004\nMr. Robert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n820 Bear Tavern Road, Suite 103\nWest Trenton, New Jersey 08628\nRe: Notice of Hearing, UGI Energy Services\nCPF No. 1-2020-009-NOPSO\nDear Mr. Coyle and Mr. Burrough:\nIn accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of\nProposed Safety Order issued by the Pipeline and Hazardous Materials Safety Administration in\nthe above-referenced case. The hearing will take place on April 6, 2021, beginning at 9:00 am\nEastern Time.\nThe hearing will be held via videoconference. I will provide the videoconference information\nprior to the hearing. At least 10 calendar days prior to the hearing (or by March 27, 2021), both\nparties must submit and exchange any additional written materials they intend to present at the\nhearing and the name and email address of each attendee. This information should be provided\nelectronically. Materials not submitted by this date may be excluded.\nIf you have any questions, please do not hesitate to contact me.\nSincerely,\nKristin Baldwin\nPresiding Official\ncc: Ms. Ajoke Agboola, Counsel, Office of Pipeline Safety, PHMSA\nMs. Melanie Lampton, Counsel, Office of Pipeline Safety, PHMSA\n\n12020009NOPSO_Consent Agreement and Order_08162021_(20-187254)_text.pdf\n\nAugust 16, 2021\nVIA ELECTRONIC MAIL TO: jhartz@ugies.com\nMr. Joseph L. Hartz\nPresident of UGI Energy Services, LLC\n1 Meridian Blvd.\nWyomissing, PA 19610\nCPF No. 1-2020-009-NOPSO\nDear Mr. Hartz:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement between\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA) and UGI Energy Services,\nLLC, (UGIES) which was executed on August 10, 2021. Service of the Consent Order and\nConsent Agreement by e-mail is deemed effective upon the date of transmission, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosures: Consent Order\nConsent Agreement\ncc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMs. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Frank Markle, Senior Counsel, UGI Corporation, marklef@ugicorp.com\nMr. Keith Coyle, Babst Calland, Counsel for UGIES, kcoyle@babstcalland.com\nMs. Brianne Kurdock, Babst Calland, Counsel for UGIES, bkurdock@babstcalland.com\nCONFIRMATION OF 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)\nIn the Matter of )\n)\nUGI Energy Services, LLC, ) CPF No. 1-2020-009-NOPSO\n)\nRespondent. )\n)\nCONSENT ORDER\nBy letter dated September 4, 2020, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS or Agency), issued a Notice of Proposed Safety Order\n(Notice) to UGI Energy Services, LLC (UGIES).\nIn accordance with 49 C.F.R. § 190.239, the Notice alleged that conditions exist on\nRespondent’s Temple LNG Peak Shaving Plant that pose a pipeline integrity risk to public\nsafety, property, or the environment. The Notice also proposed that Respondent take certain\ncorrective measures to remedy the alleged conditions and ensure that the public, property, and\nthe environment are protected from the potential risk.\nIn response to the Notice, Respondent requested an informal consultation. After two informal\nconsultations were held, UGIES requested a hearing, which was held virtually on April 6, 2021.\nFollowing the hearing, PHMSA and UGIES reengaged in good-faith settlement discussions that\nhave resulted in the Consent Agreement attached to this Consent Order that settles all of the\nallegations in the Notice.\nAccordingly, the Consent Agreement is hereby approved and incorporated by reference into this\nConsent Order. The Respondent is hereby ordered to comply with the terms of the Consent\nAgreement, effective immediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties of up to $200,000, as adjusted for inflation (see 49 C.F.R.\n§ 190.223), for each violation for each day the violation continues or in referral to the Attorney\nGeneral for appropriate relief in a district court of the United States. The terms and conditions of\nthis Consent Order are effective upon service in accordance with 49 C.F.R. § 190.5.\nAugust 16, 2021\n________________________ ________________________\nAlan K. Mayberry Date\nAssociate Administrator\nfor Pipeline Safety\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\n)\nIn the Matter of )\n)\nUGI Energy Services, LLC, ) CPF No. 1-2020-009-NOPSO\n)\nRespondent. )\n)\nCONSENT AGREEMENT\nOn September 4, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety, issued a Notice of Proposed Safety Order (Notice) to UGI Energy\nServices, LLC, a subsidiary of UGI Corporation (UGIES or Respondent).1 PHMSA issued the\nNotice after it initiated an investigation into the safety of the liquefied natural gas (LNG) storage\ntank 1 at the Temple LNG Peak Shaving Plant (Temple 1).\nThe Notice alleged two conditions exist with Temple 1 that pose a potential pipeline integrity risk\nto public safety, property, or the environment. Those two conditions were identified as\ndeformation at various anchor strap locations along the circumference of Temple 1’s outer tank\nand natural gas migration between the tank floor and the foundation. The Notice proposed that\nRespondent take certain corrective actions to remedy the alleged conditions and ensure that the\npublic, property, and the environment are protected from potential risk.\nOn September 20, 2020, UGIES responded to the Notice by timely submitting a written response\nand a request for an informal consultation. Two informal consultations were held on October 28,\n2020 and November 12, 2020. After the informal consultations, pursuant to 49 C.F.R. §\n190.239(b)(3), UGIES requested a hearing on January 19, 2021. A hearing was held virtually on\nApril 6, 2021 before a PHMSA Presiding Official.\nFollowing the hearing, PHMSA and UGIES (collectively, the Parties) reengaged in settlement\ndiscussions and have jointly determined that settlement of this proceeding will avoid further\nadministrative proceedings or litigation and that entering into this Consent Agreement\n(Agreement) is the most appropriate means of resolving the issues raised in the Notice. Therefore,\npursuant to 49 C.F.R. Part 190, without adjudication of any issue of fact or law, and upon consent\nand agreement of the Parties, UGIES and PHMSA agree to the terms and conditions set forth in\nthis Agreement.\n1 UGIES is a wholly owned subsidiary of UGI Corporation, an international energy distribution and services\ncompany.\n1\n\n\n\nI. General Provisions\n1. Respondent acknowledges that as the operator of Temple 1, Respondent is subject to the\njurisdiction of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and\nadministrative orders issued thereunder. For purposes of this Agreement, Respondent\nacknowledges that it received proper notice of PHMSA's action in this proceeding and that the\nNotice states claims upon which relief may be granted pursuant to 49 U.S.C. 60101, et seq., and\nthe regulations and orders issued thereunder.\n2. Respondent agrees, for purposes of the Agreement, to address the integrity risks identified\nin the Notice by completing the actions specified in Section II of the Agreement (Corrective\nMeasures) and to abide by the terms of this Agreement. This Agreement does not constitute a\nfinding of violation of any Federal law or regulation and may not be used in any civil or\nadministrative proceeding of any kind as evidence or proof of any fact, fault or liability, or as\nevidence of the violation of any law, rule, regulation or requirement, except in a proceeding to\nenforce the provisions of this Agreement.\n3. After Respondent returns this signed Agreement to PHMSA, a PHMSA’s representative\nwill present it to the Associate Administrator for Pipeline Safety recommending that the Associate\nAdministrator adopt the terms of this Agreement by issuing an administrative order (Consent\nOrder) incorporating the terms of this Agreement. The terms of this Agreement constitute an offer\nof settlement until accepted by the Associate Administrator. Once accepted, the Associate\nAdministrator will issue a Consent Order incorporating the terms of the Agreement.\n4. Respondent consents to the issuance of the Consent Order, and hereby waives any further\nprocedural requirements with respect to its issuance. Respondent waives all rights to contest the\nadequacy of notice, or the validity of the Consent Order or this Agreement, including all rights to\nadministrative or judicial hearings or appeals, except as set forth herein.\n5. This Agreement shall apply to and be binding upon PHMSA, and upon UGIES, its officers,\ndirectors, and employees, and its successors, assigns, or other entities or persons otherwise bound\nby law. Respondent agrees to provide a copy of this Agreement and any incorporated work plans\nand schedules to all of UGIES' officers, employees, and agents whose duties might reasonably\ninclude compliance with this Agreement.\n6. For all transfers of ownership or operating responsibility of the Temple LNG Peak Shaving\nPlant, Respondent will provide a copy of this Agreement to the prospective transferee at least 30\ndays prior to such transfer and simultaneously provide written notice of the prospective transfer to\nthe PHMSA Southwest Region Director (Director), with a copy to the Eastern Region Director,\nwho issued the Notice.2\n7. This Agreement constitutes the final, complete and exclusive agreement and understanding\nbetween the Parties with respect to the subject matter of the Notice and the settlement embodied\nin this Agreement. The Parties acknowledge that there are no representations, agreements or\n2\n2 Although PHMSA Eastern Region Director issued this Notice for this matter, for the purposes of this Agreement,\nDirector is defined as PHMSA Southwest Region Director.\n\n\n\nunderstandings relating to settlement other than those expressly contained in this Agreement,\nexcept that the terms of this Agreement may be construed by reference to the Notice.\n8. Nothing in this Agreement affects or relieves Respondent of its responsibility to comply\nwith all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq.,\nand the regulations and orders issued thereunder. Nothing in this Agreement alters PHMSA's right\nof access, entry, inspection, and information gathering or PHMSA's authority to bring enforcement\nactions against UGIES pursuant to the Federal pipeline safety laws, the regulations and orders\nissued thereunder, or any other provision of Federal or State law.\n9. This Agreement does not waive or modify any Federal, State, or local laws or regulations\nthat are applicable to Respondent's LNG or pipeline systems. This Agreement is not a permit, or\na modification of any permit, under any Federal, State, or local laws or regulations. UGIES remains\nresponsible for achieving and maintaining compliance with all applicable Federal, State, and local\nlaws, regulations and permits.\n10. This Agreement does not create rights in, or grant any cause of action to, any third party\nnot party to this Agreement. The U.S. Department of Transportation is not liable for any injuries\nor damages to persons or property arising from acts or omissions of Respondent or its officers,\nemployees, or agents carrying out the work required by this Agreement. UGIES agrees to hold\nharmless the U.S. Department of Transportation, its officers, employees, agents, and\nrepresentatives from any and all causes of action arising from any acts or omissions of Respondent\nor its contractors in carrying out any work required by this Agreement.\n11. Upon issuance of the Consent Order, UGIES agrees to perform the Corrective Measures\nset forth below in Section II.\nII. Corrective Measures\n12. Temporary Gas Detection. Within 15 days of the Effective Date of the Consent Order,\nUGIES shall begin to implement and follow of its Alarm Response LNG Tank Gas Detection\nProcedure, including ordering any necessary gas detection equipment. See Appendix A. The gas\ndetection equipment must be installed no later than 15 days after receipt of the equipment and must\nbe continuously operated in place until approval is given by the Director for removal. UGIES\nmust comply with the notification requirements in paragraph 16 if a gas leak is discovered at\nTemple 1. UGIES must obtain the Director’s approval under paragraph 21 to modify the\nprocedures referenced in Appendix A.\n13. Heater Cable Replacement Project. Within 30 days of the Effective Date of the Consent\nOrder, UGIES must begin installing the heater cable replacement project as described in the\nConduit Cleaning and Heater Tube Installation Procedure. See Appendix B. UGIES must\ncomplete the heater cable replacement project within 120 days of initiating the work. UGIES must\ncomply with the notification requirements in paragraph 16 when the heater cable replacement\nproject is initiated, if issues (including unexpected events, such as the presence of natural gas,\nbroken equipment or facilities, a fire, or inability to follow its procedures) are encountered during\nthe project or while the facilities are readied for service. UGIES must also comply with the\n3\n\n\n\nnotification requirements in paragraph 16 if any of the following events occur during the heater\nreplacement project: (i) conduits 1, 3, 4, 6, 8, 10, 12, 14, 16, 17, or 19 are sealed and abandoned,\n(ii) more than 50 percent of the total number of conduits are sealed and abandoned, (iii) any\nadjacent conduits are sealed and abandoned, or (iv) additional engineering approval is sought from\nMatrix PDM to proceed with the project. UGIES will not use any of the facilities installed as part\nof the heater cable replacement project for more than five years from the in-service date. UGIES\nmust obtain the Director’s approval under paragraph 21 to modify the procedures referenced in\nAppendix B.\n14. Shell Deformation. Upon the Effective Date of the Consent Order, UGIES will implement\nand follow the provisions in the MP-65, LNG Tank Foundation Settlement Inspection and MP-\n108, LNG Tank Shell Deformation Assessment. See Appendix C. UGIES must conduct an\ninspection of Temple 1 for foundation settlement and shell deformation at least once each calendar\nyear, but at intervals not to exceed fifteen months. UGIES must comply with the notification\nrequirements in paragraph 16 to provide the annual inspection results to PHMSA. UGIES must\nobtain the Director’s approval under paragraph 21 to modify the procedures referenced in\nAppendix C.\n15. Long-Term Remediation Plan. UGIES will promptly commence development of a plan\nto either: (i) temporarily remove Temple 1 from service in order to conduct an internal inspection\nof Temple 1, identify the root cause of the gas migration problem, and complete remediation; or\n(ii) decommission Temple 1, in which case UGIES may replace the LNG storage and/or\ndeliverability of Temple 1 with other assets to be constructed at the Temple LNG Terminal or\nanother location (Long-Term Remediation Plan). UGIES will complete the necessary analysis,\nselect an option, and obtain management approval for the recommended (i) remediation or (ii)\ndecommission and replacement, and provide the Director with the Long-Term Remediation Plan\nwithin twelve months of the Effective Date of the Consent Order. UGIES must include an\nimplementation schedule in the Long-Term Remediation Plan that requires the completion of all\nnecessary activities by no later than July 1, 2025. If UGIES elects to perform an internal tank\ninspection, the implementation schedule must require Temple 1 to be temporarily removed from\nservice for the performance of that inspection by no later than July 1, 2023. The terms of the\nLong-Term Remediation Plan, except for provisions related to the replacement of Temple 1 or the\nconstruction of new LNG facilities, will be subject to the Director’s approval. The replacement of\nTemple 1 or construction of any new LNG facilities would be governed by applicable law,\nincluding 49 C.F.R. Part 193. UGIES must comply with the notification requirements in paragraph\n16 upon completion of the provisions in the Long-Term Remediation Plan.\n16. events:\nNotification. UGIES must notify the Director within 48 hours of any of the following\n(1) a gas leak of any concentration discovered at Temple 1;\n(2) the heater cable replacement project is initiated in accordance with the procedures\nreferenced in Appendix B;\n(3) any issues are encountered during the heater cable replacement project performed under\nthe procedures referenced in Appendix B;\n4\n\n\n\n(4) conduits 1, 3, 4, 6, 8, 10, 12, 14, 16, 17, or 19 are sealed and abandoned, more than 50\npercent of the total number of conduits are sealed and abandoned, any adjacent conduits\nare sealed and abandoned, or additional engineering approval is sought from Matrix PDM\nto proceed with the project under the procedures referenced in Appendix B;\n(5) the facilities installed as part of the heater cable replacement project are ready for\nservice under the procedures referenced in Appendix B;\n(6) the results of an annual foundation settlement or shell deformation inspection\nperformed under the procedures referenced in Appendix C are complete; or\n(7) implementation of the Long-Term Remediation Plan referenced in paragraph 15 is\ncomplete.\n17. Quarterly Reports. UGIES will submit quarterly reports to the Director that: (1) include\nanalysis of all available data and results of the testing and evaluations required by this Agreement;\nand (2) describe the progress of the repairs and other remedial actions being undertaken as required\nby this Agreement. The first report will be due 45 days from the Effective Date of the Consent\nOrder.\n18. Referenced Procedures. UGIES must provide copies of the procedures referenced in this\nAgreement not previously provided to the Director for review and acceptance. No Corrective\nMeasure shall be performed pursuant to a procedure referenced in this Agreement that has not be\nreviewed and accepted by the Director.\n19. Extensions of Time. The Director may grant an extension of time for compliance with any\nof the terms of the Agreement upon a written request timely submitted demonstrating good cause\nfor an extension. The Director shall respond in writing to any such request.\n20. Appeals. Respondent may appeal any decision of the Director to the Associate\nAdministrator for Pipeline Safety. Decisions of the Associate Administrator will be final.\nIII. Review and Approval Process\n21. With respect to any submission under Section II (Corrective Measures) of this Agreement\nthat requires the approval of the Director, the Director may: (a) approve, in whole or in part, the\nsubmission, (b) approve the submission on specified, reasonable conditions, (c) disapprove, in\nwhole or in part, the submission, or (d) any combination of the foregoing. If the Director approves,\napproves in part, or approves with conditions, UGIES will take all action as approved by the\nDirector, subject to Respondent's right to invoke the dispute resolution procedures in Section IV\nwith respect to any conditions the Director identifies. If the Director disapproves all or any portion\nof the submission, the Director will provide UGIES with a written notice of the deficiencies.\nRespondent will correct all deficiencies within the time specified by the Director and resubmit it\nfor approval.\nIV. Dispute Resolution\n22. The Director and UGIES will informally attempt to resolve any disputes arising under this\nAgreement. If Respondent and the Director are unable to informally resolve the dispute within 15\n5\n\n\n\ndays of submittal of Respondent's invoking dispute resolution, UGIES may request in writing,\nwithin 10 days thereafter, a written determination resolving the dispute from the Associate\nAdministrator for Pipeline Safety providing all information that Respondent believes is relevant\nto the dispute. If the request is submitted as provided herein, the Associate Administrator will issue\na final determination in writing. The existence of a dispute and PHMSA's consideration of matters\nplaced in dispute will not excuse, toll, or suspend any term or timeframe for completion of any\nwork to be performed under this Agreement during the pendency of the dispute resolution process\nexcept as agreed by the Director or the Associate Administrator in writing.\nV. Enforcement\n23. This Agreement, as adopted by the Consent Order, is subject to all the enforcement\nauthorities available to the PHMSA under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190. All\nprocedures set forth or referenced in Section II will be automatically incorporated into this\nAgreement and are enforceable in the same manner.\nVI. Recordkeeping and Information Disclosure\n24. Unless otherwise required in this Agreement, UGIES agrees to maintain records\ndemonstrating compliance with all requirements of this Agreement for a period of at least five\nyears following completion of all work to be performed. For any reports, plans, or other\ndeliverables required to be submitted to PHMSA pursuant to this Agreement, UGIES may assert\na claim of business confidentiality or other protections applicable to the release of information by\nPHMSA, covering part or all of the information required to be submitted to PHMSA pursuant to\nthis Agreement in accordance with 49 C.F.R. Part 7. UGIES must mark the claim of confidentiality\nin writing on each page, and include a statement specifying the grounds for each claim of\nconfidentially. PHMSA determines release of any information submitted pursuant to this\nAgreement in accordance with 49 C.F.R. Part 7, the Freedom of Information Act, 5 U.S.C. § 552,\nDOT and PHMSA policies, and other applicable regulations and Executive Orders.\nVII. Effective Date\n25. The term \"Effective Date,\" as used herein, is the date on which the Consent Order is issued\nby the Associate Administrator incorporating the terms of this Agreement. Unless specified to the\ncontrary, all deadlines for actions required by this Agreement run from the Effective Date of this\nConsent Order.\nVIII. Modification\n26. The terms of this Agreement may be modified by mutual agreement of the Parties. Such\nmodifications must be in writing and signed by both parties.\nIX. Termination\n27. This Agreement shall remain in effect until the Corrective Measures set forth in Section II\nare satisfied, as determined by the Director, or after UGIES decommissions Temple 1. Nothing in\n6\n\n\n\nthis Agreement prevents UGIES from completing any of the obligations earlier than the deadlines\nprovided for in this Agreement.\nX. Ratification\n28. The Parties' undersigned representatives certify that they are fully authorized to enter into\nthe terms and conditions of this Agreement and to execute and legally bind such party to this\ndocument.\n29. The Parties hereby agree to all conditions and terms of this Agreement.\nFor Respondent:\n___________________________________\nJoseph L. Hartz\nPresident of UGI Energy Services, LLC\n___________________________________\nDate\nFor PHMSA:\n___________________________________\nRobert Burrough\nDirector, Eastern Region, Office of Pipeline Safety\n___________________________________\nDate\n7\n\n12020009NOPSO_Notice of Proposed Safety Order_09042020_(20-187254)_text.pdf\n\nNOTICE OF PROPOSED SAFETY ORDER\nOVERNIGHT EXPRESS DELIVERY\nSeptember 4, 2020\nJoseph Hartz\nVice President, Asset Management\nUGI Energy Services\n1 Meridian Blvd\nWyomissing, PA 19610\nCPF 1-2020-009-NOPSO\nDear Joseph Hartz:\nEnclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case. The\nNotice proposes that you take certain measures with respect to UGI Energy Services’ (UGIES or\nRespondent) Temple LNG Peak Shaving Plant’s (LNG Plant) storage tank 1 (Tank 1) to ensure\npipeline safety. Your options for responding are set forth in the Notice. Your receipt of the Notice\nconstitutes service of that document under 49 C.F.R. § 190.5.\nWe look forward to a successful resolution to ensure pipeline safety. Please direct any questions\non this matter to me at (609) 771-7809.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Notice of Proposed Safety Order\nCopy of 49 C.F.R. § 190.239\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nEASTERN REGION\nWEST TRENTON, NJ 08628\n_________________________________________\n)\nIn the Matter of )\n)\nUGI Energy Services )\na subsidiary of UGI Corporation, ) CPF No. 1-2020-009-NOPSO\n)\n)\nRespondent. )\n_________________________________________ )\nNOTICE OF PROPOSED SAFETY ORDER\nPursuant to Chapter 601 of Title 49, United States Code, the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), U.S. Department of Transportation, has initiated an\ninvestigation into the safety of UGI Energy Services’ (UGIES or Respondent) Temple LNG Peak\nShaving Plant’s (LNG Plant) storage tank 1 (Tank 1). UGIES is a wholly owned subsidiary of UGI\nCorporation, an international energy distribution and services company.1\nThe investigation was prompted following a discussion of a Federal Energy Regulatory\nCommission’s (FERC) inspection conducted in August 2018. FERC reported that the south-east\nportion of Tank 1’s shell was buckling and gas was migrating between the tank floor and the\nheating conduits beneath the tank. FERC also informed PHMSA that UGIES had applied a weather\nseal to act as a vapor barrier around the entire base of Tank 1.\nOn August 31, 2018, PHMSA requested information on the gas migration beneath the tank from\nUGIES. The Respondent provided a May 2018 tank inspection report conducted by Matrix PDM\nentitled Project No. 5308-1103 Temple 1 LNG Tank Inspection Report (Matrix PDM Report) and\ninformation on the multi-layer epoxy weather proofing seal that was applied to the base of Tank\n1. Over the course of 18 months, UGIES has attempted to mitigate the detected vapor leaks by\napplying a seal to the circumference of the chime and horizontal plane of Tank 1’s concrete\nfoundation. UGIES also sleeved the heater conduits with stainless steel tubing upon discovering\n1 UGI Corporation Website, About UGI, available at https://www.ugicorp.com/company/corporate-\ninformation/about-ugi/default.aspx, (last accessed August 19, 2020).\n\n\n\nthat they were exposed to natural gas vapor in the tank’s annular space. Work on the heater\nconduits is ongoing.\nBackground and Purpose:\nOn July 29, 2020, PHMSA conducted an onsite inspection of Tank 1 to continue its investigation\nof the natural gas vapor migration in Tank 1. During the inspection, PHMSA observed that the\nshell was deformed around the entire circumference of Tank 1 and the area that had the greatest\ndeformation was the south-east area of the tank. PHMSA also observed UGEIS constructing a new\ntruck loading station adjacent to Tank 1.\nAs a result of the preliminary investigation, it appears conditions exist at your liquefied natural gas\n(LNG) facility that pose an integrity risk to public safety, property, or the environment. Pursuant\nto 49 U.S.C. § 60117(l), PHMSA, Office of Pipeline Safety (OPS), issues this Notice of Proposed\nSafety Order (Notice), notifying you of the preliminary findings of the investigation, and proposing\nthat you take certain measures to ensure that the public, property, and the environment are\nprotected from this integrity risk.\nFor the purposes of this Notice:\n\"Director\" means the Director, Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety, Eastern Region. The Director’s address is 840 Bear Tavern\nRoad, Suite 300, West Trenton, NJ 08628.\nPreliminary Findings:\n The UGIES LNG Plant is located in Temple, Pennsylvania. UGIES’ LNG Plant has a\nstorage capacity of 15 million gallons of LNG and a maximum daily deliverability of\n205,200 dekatherms (Dth). The LNG Plant has a liquefaction capacity of 120,000 gallons\nper day (10,000 Dth).\n UGIES Temple LNG Tank 1 is one of two LNG tanks located in the UGIES LNG Plant.\nTank 1 is a single containment, double-wall tank with a flat bottom, suspended deck, and\ndome outer roof. The inner tank has a diameter of 75 feet and the outer tank has a diameter\nof 87 feet. Tank 1 has a height of 93 feet and a nominal capacity of 73,000 barrels (bbls).\nFrom January 2015 until July 2020, Tank 1 has stored approximately 34,000± bbls of\nLNG each year. Tank 1 was constructed in 1972 and is equipped with an impressed current\ncathodic protection system.\n The LNG Plant site is 6.62 acres of fenced-in industrial land, with open grass areas along\nwith 1.56 acres of existing pipeline right of way. The LNG Plant is located north of the\nCity of Reading in Berks County, Pennsylvania. Reading encompasses 10 square miles\nand has a population density of 8,993 people per square mile. Between 2016 and 2017 the\npopulation of Reading, Pennsylvania grew from 87,899 to 88,275, a 0.428% increase. The\n\n\n\nLNG Plant is located adjacent to US Highway 222, which serves as the state's principal\nartery between the Lancaster and Reading areas.\n Deformation was observed at various anchor strap locations along the circumference of\nUGIES Tank 1 with the most severe instance occurring in the southeast area --\napproximately 10 feet long and 6 feet in height.\n UGIES Tank 1 is experiencing natural gas vapor migration between the tank floor and the\nfoundation.\n The primary source of the vapor seepage in the heater conduit remains unknown. Natural\ngas vapor in the heater system presents an identifiable ignition hazard.\n The migration and seepage of Tank 1’s natural gas vapors in conjunction with the\nconstruction activities adjacent to the tank present an increased risk of accidental ignition.\n To date, UGIES has not be able to demonstrate to PHMSA that the remediation measures\nit has performed complies with the repair requirements of Part 193 to ensure the integrity\nand operational safety of Tank 1. See 49 C.F.R. § 193.2617.\nProposed Issuance of Safety Order:\nSection 60117(1) of Title 49, United States Code, provides for the issuance of a safety order, after\nreasonable notice and the opportunity for a hearing, requiring corrective action, which may include\nphysical inspection, testing, repair, replacement, or other action, as appropriate. The basis for\nmaking the determination that a pipeline facility has a condition or conditions that pose a pipeline\nintegrity risk to public safety, property, or the environment is set forth both in the above referenced\nstatute and 49 C.F.R. § 190.239, a copy of which is enclosed.\nAfter evaluating the foregoing preliminary findings of fact and considering the hazardous nature\nof the product, the characteristics of the geographical area where the LNG facility is located, the\nongoing construction at the LNG facility which may result in an increased risk of accidental\nignition of the migrating gas, the unknown factors that resulted in the buckling of Tank 1, and the\nlikelihood that the issues could affect the safety of other areas of the LNG facility, it appears that\ncontinued operation of the affected LNG Plant without corrective measures may pose an integrity\nrisk to public safety, property, or the environment.\nAccordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the\nproposed issuance of a safety order and to propose that Respondent take measures specified herein\nto address the potential risk\nProposed Corrective Actions:\n\n\n\nPursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to UGIES a\nsafety order incorporating the following remedial requirements with respect to its Temple LNG\nPeak Shaving Plant’s Tank 1:\n1. 2. 3. 4. Limit Capacity. UGIES shall immediately limit the operations of Tank 1 to a liquid level\nno greater than 35,000 bbls or 50% of the tank capacity. If UGIES determines that a\ndifferent level is necessary for safe operation, it must provide all information used in\ncalculating this level to the Director. The liquid level reduction must remain in place until\napproval to resume normal operations of Tank 1 is given by the Director.\nGas Detection. UGIES shall immediately install temporary gas detection around Tank 1.\nThe gas levels should be monitored and recorded. The temporary gas detection must be\ninstalled so that it will alert the control center and plant personnel of a natural gas vapor\nleak in the vicinity of the Tank 1 chime area. The gas detection must remain in place until\napproval is given by the Director for removal.\nRecords Inventory. Within 30 days of the date of the Safety Order, UGIES must submit to\nthe Director a complete inventory of all design and construction records for Tank 1. This\ninventory of records for Tank 1 must include, but is not be limited to, tank metallurgical\nand mechanical records of the shell plates and bottom plates; shell plate and bottom plate\nwelding records; non-destructive examination records; tank design specifications and all\nloading conditions; all tank hydrotest records; all leak surveys; inspection records of the\nheating conduits; and settlement surveys for the life of the tank. Additionally, the inventory\nmust include all geotechnical investigations and geotechnical updates conducted at the\nLNG Plant.\nFitness-for-Service Assessment. Within 90 days of the date of the Safety Order, UGIES\nmust complete a fitness-for-service assessment in accordance with API RP 579-1 / ASME\nFFS-1, Fitness-for-Service (3rd edition), issued in June 2016. All flaw types or damage\nmechanisms needed to determine if Tank 1 is fit for service must be evaluated. The fitness-\nfor-service assessment must follow the eight-step process outlined in Section 2.1.3 (FFS\nAssessment Procedure) of API RP 579-1/ASME FFS-1.\n5. Remedial Work Plan. Within 30 days following completion of the fitness-for-service\nassessment, UGIES must submit a Remedial Work Plan (RWP) to the Director for\napproval. The RWP must include actions to remedy any issues identified by the Records\nInventory and Fitness-for-Service Assessment, described above, as well as any other\nidentified risk conditions determined by the investigation of the deformation of the shell\nplates and migrating natural gas vapors in the foundation heater conduits. Identified risk\nconditions may include, but is not limited to: (1) the continued presence of natural gas\nvapors in the foundation slots that contain the heater conduits; (2) evidence of differential\n\n\n\ncircumferential settlement of the tank foundation that exceeds design criteria; (3)\ngeotechnical evidence that would require additional assessment and/or remediation to\nsufficiently support the tank; and (4) out-of-roundness and localized distortions and\nbuckles that impair structural integrity of the tank.\na. The Director may incrementally approve parts of the RWP without approving the\nentire RWP.\nb. Once approved by the Director, the approved RWP increments or entire RWP is\nconsidered incorporated by reference into this Safety Order or Consent Agreement.\nc. The RWP must specify the tests, inspections, assessments, evaluations, and\nremedial measures UGIES will use in order to remedy issues identified.\nd. The RWP must include the following steps:\ni. Integrate the results of the Fitness-For-Service Assessment, and other\ncorrective actions required by this Safety Order with all relevant preexisting\noperational and assessment data for the identified risk conditions. Pre-\nexisting operational data includes, but is not limited to, construction,\noperations, maintenance, testing, repairs, prior metallurgical analyses, and\nany third-party consultation information.\nii. Determine if conditions similar to those found when assessing Tank 1 are\nlikely to exist elsewhere within the plant.\niii. Conduct additional field tests, inspections, assessments, and/or evaluations\nto determine whether, and to what extent, the conditions similar to those\nfound when assessing Tank 1 are likely to be present elsewhere in the plant.\nAt a minimum, this process must consider evidence of differential\nsettlement and the presence of natural gas found from an unknown source\nand specify the use of tests, inspections, assessments, and evaluations\nappropriate for these conditions. UGIES may use the results of previous\ntests, inspections, assessments, and evaluations, if approved by the Director,\nprovided the results of the tests, inspections, assessments, and evaluations\nare analyzed with regard to the factors found on Tank 1.\niv. Describe the inspection and repair criteria UGIES will use to prioritize,\nevaluate, and repair anomalies, imperfections, and other identified integrity\nthreats. Include a description of how any defects will be graded and a\nschedule for repairs or replacement.\nv. Based on the known history and condition of the tank and components\nincluded in the identified risk condition, describe the methods UGIES will\n\n\n\n6. use to repair, replace, or take other corrective measures to remediate the\nconditions associated with Tank 1, and to address other known integrity\nthreats discovered at the plant. The repair, replacement, or other corrective\nmeasures must be completed in accordance with 49 C.F.R. § 193.2617.\nvi. Implement continuing long-term periodic inspection and integrity\nverification measures to ensure","truncated":true,"body_characters":46613}