{"operation":"document","citation":"CPF 12022022WL","title":"FREEPORT LNG DEVELOPMENT, L.P. — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-02-08","effective_on":null,"summary":"CLOSED warning letter citing 192.12(a)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022022wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022022wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022022wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12022022WL","body":"Warning Letter involving FREEPORT LNG DEVELOPMENT, L.P.. PHMSA's enforcement data identifies the cited regulation as 192.12(a)(3). The case was opened on 2022-02-08 and is reported as closed as of 2022-02-08. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12022022WL_Warning Letter_02082022_(21-200074).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022022WL/12022022WL_Warning%20Letter_02082022_(21-200074).pdf\n\n12022022WL_Warning Letter_02082022_(21-200074)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022022WL/12022022WL_Warning%20Letter_02082022_(21-200074)_text.pdf\n\n12022022WL_Warning Letter_02082022_(21-200074)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nFebruary 8, 2022\nMr. Mark Mallet\nVice President Operations and Engineering\nFreeport LNG Development, L.P.\n1500 Lamar Street\nQuintana, Texas 77541\nCPF 1-2022-022-WL\nDear Mr. Mallet:\nFrom May 25 through May 27, 2021, a representative of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.)\ninspected Freeport LNG Development, L.P.’s (Freeport) Underground Natural Gas Storage\nFacility in Quintana, Texas.\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. § 192.12 Underground natural gas storage facilities.\n(a) Salt cavern UNGSFs.\n(1) …\n(3) Each UNGSF that uses a solution-mined salt cavern for natural\ngas storage and was constructed on or before July 18, 2017, must meet\nthe provisions of API RP 1170 (incorporated by reference, see § 192.7),\nsections 9, 10, and 11, and paragraph (c) of this section, by January 18,\n2018, and must meet all provisions of section 8 of API RP 1171\n(incorporated by reference, see § 192.7) that are applicable to the\nphysical characteristics and operations of a solution-mined salt cavern\nUNGSF, and paragraph (d) of this section, by March 13, 2021.\n\n\n\nCPF 1-2022-022-WL\nFreeport failed to meet the provisions of API RP 1171, Section 8. Specifically, Freeport’s risk\nidentification and risk analysis failed to evaluate all potential threats and hazards impacting its\nstorage wells in accordance with API RP 1171, Section 8.4.2 (Section 8.4.2)1\n.\nSection 8.4.2 states, in part, “[t]he operator shall evaluate potential threats and hazards impacting\nstorage wells and reservoirs”.\nDuring the inspection, PHMSA reviewed Freeport’s UNGS Risk Management Plan (RMP), Rev 2\ndated 05/21/2021. Freeport’s RMP did not address a key threat/hazard related to salt creep\nimpacting well casing and cement bond integrity. This threat was referenced in Section 6,\nSummary and Conclusion, of its Geo-Mechanical Design Study of Freeport, Natural Gas Storage\nCaverns at the Stratton Ridge Dome, Texas, Topical Report RSI-2191, March 2011 Rev1.\nTherefore, by failing to evaluate all potential threats and hazards, Freeport failed to comply with\nthe provisions of Section 8.4.2.\n2. § 192.12 Underground natural gas storage facilities.\n(a) Salt cavern UNGSFs.\n(1) …\n(3) Each UNGSF that uses a solution-mined salt cavern for natural\ngas storage and was constructed on or before July 18, 2017, must meet\nthe provisions of API RP 1170 (incorporated by reference, see § 192.7),\nsections 9, 10, and 11, and paragraph (c) of this section, by January 18,\n2018, and must meet all provisions of section 8 of API RP 1171\n(incorporated by reference, see § 192.7) that are applicable to the\nphysical characteristics and operations of a solution-mined salt cavern\nUNGSF, and paragraph (d) of this section, by March 13, 2021.\nFreeport failed to meet the provisions of API RP 1170, Section 10. Specifically, Freeport failed to\nperform integrity monitoring program effectiveness review session(s) in accordance with API RP\n1170, Section 10.3.\nAccording to API RP 1170 Section 10.3, periodic reviews for the effectiveness shall be included\nin an operator’s integrity monitoring program. Freeport’s Freeport LNG Underground Natural\nGas Storage Program, Doc # UGS-OPS-MAN-9001-001.0001 Rev 5, dated 05/21/2021, Section\n12.3 stated in part, “…FLNG: [SHALL] perform a periodic review of the integrity monitoring\nprogram for effectiveness”.\n1 API RP 1171 - 8.4.2 Methodology\nThe operator shall evaluate the potential threats and hazards impacting storage wells and reservoirs. The operator\nshould refer to the list of common threats and hazards in Table 1 and may supplement the list in Table 1 with other\nhazards or threats identified by site-specific assessments.\nThe operator should estimate risk from potential events that could occur related to potential threats and hazards to\nindividual facilities, such as wells, and by region when considering the reservoir.\nThe operator should assess potential threat and/or hazard interaction, such as the relationship of the threat of casing\ndamage during well drilling or service work that could exacerbate corrosion processes.\nThe operator should perform periodic evaluations of hazards, threats, and risks related to potential events in order to\naccount for changes in perception of likelihood or consequence in event potential.\n12022022WL_Warning Letter_02082022_(21-200074)_text Page 2 of 3\n\n\n\nCPF 1-2022-022-WL\nDuring PHMSA program inspection, PHMSA requested records of Freeport’s periodic\neffectiveness reviews discussed above for 2019 -2020. Freeport did not provide any record(s) of\nintegrity monitoring program effectiveness review session(s).\nTherefore, Freeport failed to comply with API RP 1170, Section 10.3 regarding performing\nperiodic effectiveness reviews of its integrity monitoring program.\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a related\nseries of violations. For violation occurring on or after January 11, 2021 and before May 3, 2021,\nthe maximum penalty may not exceed $222,504 per violation per day the violation persists, up to\na maximum of $2,225,034 for a related series of violations. For violation occurring on or after\nJuly 31, 2019 and before January 11, 2021, the maximum penalty may not exceed $218,647 per\nviolation per day the violation persists, up to a maximum of $2,186,465 for a related series of\nviolations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the\nmaximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to\nexceed $2,132,679. For violation occurring on or after November 2, 2015 and before November\n27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum\npenalty not to exceed $2,090,022.\nWe have reviewed the circumstances and supporting documents involved in this case and have\ndecided not to conduct additional enforcement action or penalty assessment proceedings at this\ntime. We advise you to correct the items identified in this letter. Failure to do so will result in\nFreeport LNG Development, L.P. being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 1-2022-022-WL. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nSincerely,\nRobert Burrough\nDirector, Eastern Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\n12022022WL_Warning Letter_02082022_(21-200074)_text Page 3 of 3","truncated":false,"body_characters":8049}