{"operation":"document","citation":"CPF 120205004W","title":"CITGO PETROLEUM CORPORATION (TERMINALS) — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-03-17","effective_on":null,"summary":"CLOSED warning letter citing 195.402(a), 195.432(b), 195.573(e).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120205004w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120205004w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120205004w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120205004W","body":"Warning Letter involving CITGO PETROLEUM CORPORATION (TERMINALS). PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.432(b),  195.573(e). The case was opened on 2020-03-17 and is reported as closed as of 2020-03-17. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120205004W_Warning Letter_03172020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120205004W/120205004W_Warning%20Letter_03172020.pdf\n\n120205004W_Warning Letter_03172020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120205004W/120205004W_Warning%20Letter_03172020_text.pdf\n\n120205004W_Warning Letter_03172020_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nMarch 17, 2020\nMr. Gustavo J. Velasquez\nVice President Supply and Marketing\nCitgo Petroleum Corporation (Terminals)\n1293 Eldridge Parkway\nHouston, TX 77077\nCPF 1-2020-5004W\nDear Mr. Velasquez:\nFrom August 27-31, 2018, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected\nCitgo Petroleum Corporation (Terminals)’s (Citgo) facility in Linden, New Jersey.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. § 195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each\npipeline system a manual of written procedures for conducting normal\noperations and maintenance activities and handling abnormal\noperations and emergencies. This manual shall be reviewed at intervals\nnot exceeding 15 months, but at least once each calendar year, and\nappropriate changes made as necessary to insure that the manual is\neffective. This manual shall be prepared before initial operations of a\npipeline system commence, and appropriate parts shall be kept at\nlocations where operations and maintenance activities are conducted.\nCitgo failed to follow its manual of written procedures for conducting normal operations and\nmaintenance activities. Specifically, Citgo failed to follow its Terminals and Pipelines Operations\nManual (All Field Areas), Section J-31 “Fire Equipment”, revised 1/8/2018 (Section J-31),\ndeveloped to comply with § 195.430.\n\n\n\nCPF 1-2020-5004W\nSection 195.430 states:\nEach operator shall maintain adequate firefighting equipment at each\npump station and breakout tank area. The equipment must be-\n(a) In proper operating condition at all times;\n(b) Plainly marked so that its identity as firefighting equipment is clear;\nand,\n(c) Located so that it is easily accessible during a fire.\nDuring the inspection, the PHMSA inspector reviewed Citgo’s Section J-31 Procedure. The\nprocedure stated in part:\nA monthly check on all fire and safety equipment will be completed to verify that it is in\nproper operating condition.\nA written record must be made and retained on each inspection including a list of all repairs\nor replacements made to the equipment. A copy of the written report shall be maintained\nin the Pipeline/Terminal Office file. Inspection report forms can be obtained from your\nlocal fire extinguisher service provider.\nThe PHMSA inspector also reviewed Citgo’s Tremly Tank Farm Monthly Fire Pump Test records\nfor Engine #1 and #2. The records indicated that Engine #1 and #2 were not inspected and tested\non a monthly basis. The records indicated that after December 1, 2017, the pumps were not tested\nagain until April 15, 2018. Citgo failed to perform testing in January, February and March of\n2018.\nTherefore, Citgo failed in 3 instances to follow its Section J-31 Procedure by not inspecting the\nEngine #1 and #2 pumps monthly from January – March of 2018.\n2. § 195.432 Inspection of in-service breakout tanks.\n(a) …\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks\naccording to API Std 653 (except section 6.4.3, Alternative Internal\nInspection Interval) (incorporated by reference, see §195.3). However,\nif structural conditions prevent access to the tank bottom, its integrity\nmay be assessed according to a plan included in the operations and\nmaintenance manual under §195.402(c)(3). The risk- based internal\ninspection procedures in API Std 653, section 6.4.3 cannot be used to\ndetermine the internal inspection interval.\nCitgo failed to maintain a complete record of the inspection of an in-service atmospheric breakout\ntank in accordance with API 653 3rd edition, Section 6.8.3 Inspection History. Specifically, Citgo\nfailed to maintain complete documentation of the out of service (OOS) inspection of its Tank 50,\nincluding failing to document the calculation of the corrosion rate and the inspection interval to\njustify when the next OOS inspection is required.\n120205004W_Warning Letter_03172020_text Page 2 of 4\n\n\n\nCPF 1-2020-5004W\nAPI Standard 653 3rd edition states in Section 6.8.3, Inspection History:\n“The inspection history includes all measurements taken, the condition of all parts\ninspected, and a record of all examinations and tests. A complete description of any unusual\nconditions with recommendations for correction of details which caused the conditions\nshall also be included. This file will also contain corrosion rate and inspection interval\ncalculations.”\nDuring the inspection, the PHMSA inspector reviewed the most recent API 653 out-of-service\ninspection reports for the breakout tanks at Linden Terminal, Warren Tank Farm, including its\nTank 50. The HMT report for Tank 50, dated May 21-22, 2008, did not contain calculations in\naccordance with API 653, Section 4.4.5 Minimum Thickness for Tank Bottom Plate, or\ncalculations of the Inspection Interval based on corrosion rates in accordance with API 653,\nSection 6.4.2 Inspection Intervals. Citgo could not provide an explanation during the inspection as\nto why there were no calculations documented for the life of the tank bottom, its corrosion rate,\nand its associated inspection interval. Citgo subsequently contacted HMT to retrieve tank bottom\ncalculation documentation and provided it to PHMSA on September 20, 2018.\nTherefore, Citgo failed to maintain a complete record of Tank 50’s 2008 in-service inspection in\naccordance with API 653, Section 6.8.3.\n3. § 195.573 What must I do to monitor external corrosion control?\n(a) …\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the\ndeficiency involves a pipeline in an integrity management program\nunder § 195.452, you must correct the deficiency as required by §\n195.452(h).\nCitgo failed to correct an identified deficiency in corrosion control as required by § 195.401(b).\nSpecifically, Citgo failed to restore output from rectifier 5 at the Tremly Tank Farm within a\nreasonable time after it was determined to not be functioning in January of 2015.\nSection 195.401(b)(1) states:\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non-Integrity management repairs. Whenever an operator discovers\nany condition that could adversely affect the safe operation of its pipeline\nsystem, it must correct the condition within a reasonable time. However, if\nthe condition is of such a nature that it presents an immediate hazard to\npersons or property, the operator may not operate the affected part of the\nsystem until it has corrected the unsafe condition.\nDuring the inspection, the PHMSA inspector reviewed Citgo’s Rectifier Inspection Reports for\n2015. The report demonstrated that the current output at rectifier 5 at the Tremly Tank Farm was\n0 during a rectifier inspection on January 29, 2015. The current output was not documented as\n120205004W_Warning Letter_03172020_text Page 3 of 4\n\n\n\nCPF 1-2020-5004W\nrestored until the rectifier inspection on November 23, 2015. When asked about the delay in\nremediation, Citgo stated that the remedial action was delayed due to budgeting constraints.\nTherefore, Citgo failed to correct an identified deficiency in corrosion control within a reasonable\ntime as required by § 195.573(e).\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related\nseries of violations. For violation occurring on or after November 27, 2018 and before July 31,\n2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum\npenalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before\nNovember 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a\nmaximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015,\nthe maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty\nnot to exceed $2,000,000 for a related series of violations. We have reviewed the circumstances\nand supporting documents involved in this case, and have decided not to conduct additional\nenforcement action or penalty assessment proceedings at this time. We advise you to correct the\nitem(s) identified in this letter. Failure to do so will result in Citgo being subject to additional\nenforcement action.\nBe advised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you must\nprovide a second copy of the document with the portions you believe qualify for confidential\ntreatment redacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b).\nNo reply to this letter is required. If you choose to reply, please submit all correspondence in this\nmatter to Robert Burrough, Director, PHMSA Eastern Region, 840 Bear Tavern Road, Suite 300,\nWest Trenton, NJ 08628. Please refer to CPF 1-2020-5004W on each document you submit, and\nwhenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed\nto robert.burrough@dot.gov. Larger files should be sent on USB flash drive accompanied by the\noriginal paper copy to the Eastern Region Office.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n120205004W_Warning Letter_03172020_text Page 4 of 4","truncated":false,"body_characters":10654}