{"operation":"document","citation":"CPF 12023001NOPSO","title":"KINDER MORGAN LIQUID TERMINALS, LLC — Safety Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":"2023-02-23","effective_on":null,"summary":"OPEN safety order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023001nopso.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023001nopso.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023001nopso","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12023001NOPSO","body":"Safety Order involving KINDER MORGAN LIQUID TERMINALS, LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2023-02-23 and is reported as open. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12023001NOPSO_Consent Agreement and Order_09292023_(22-263035).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023001NOPSO/12023001NOPSO_Consent%20Agreement%20and%20Order_09292023_(22-263035).pdf\n\n12023001NOPSO_Consent Agreement and Order_09292023_(22-263035)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023001NOPSO/12023001NOPSO_Consent%20Agreement%20and%20Order_09292023_(22-263035)_text.pdf\n\n12023001NOPSO_Notice of Proposed Safety Order_02232023_(22-263035).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023001NOPSO/12023001NOPSO_Notice%20of%20Proposed%20Safety%20Order_02232023_(22-263035).pdf\n\n12023001NOPSO_Notice of Proposed Safety Order_02232023_(22-263035)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023001NOPSO/12023001NOPSO_Notice%20of%20Proposed%20Safety%20Order_02232023_(22-263035)_text.pdf\n\n12023001NOPSO_Notice of Proposed Safety Order_02232023_(22-263035)_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nFebruary 23, 2023\nMr. John Schlosser\nPresident and Chief Executive Officer\nKinder Morgan Liquid Terminals LLC\n1001 Louisiana Street, Suite 1000\nHouston, Texas 77002\nCPF 1-2023-001-NOPSO\nDear Mr. Schlosser:\nEnclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.\nThe Notice proposes that you take certain measures with respect to your Wood River Terminal in\nHartford, Illinois to ensure pipeline safety. Your options for responding are set forth in the Notice.\nYour receipt of the Notice constitutes 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\nquestions on 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\n49 C.F.R. § 190.239\nCc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, Office of\nPipeline Safety <linda.daugherty@dot.gov>\nMr. Joshua Etzel, VP Operations and Engineering, Kinder Morgan Liquid Terminals,\nLLC < joshua_etzel@kindermorgan.com>\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)\nKinder Morgan Liquid Terminals, LLC ) CPF No. 1-2023-001-NOPSO\n)\nRespondent )\n____________________________________)\nNOTICE OF PROPOSED SAFETY ORDER\nBackground and Purpose\nPursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials\nSafety Administration (PHMSA) has initiated an investigation and on-site inspection of the safety\nof Kinder Morgan Liquid Terminals, LLC’s (KMLT) Wood River Terminal in Hartford, Illinois.\nPHMSA initiated its investigation in response to a December 23, 2022, release of 11,694 barrels\nof gasoline at the Wood River Terminal. The release occurred after an above-grade pipeline\nsegment at the Wood River Terminal ruptured. PHMSA submitted a data request to KMLT on\nDecember 28, 2022, and follow-up inquiries related to the data request on January 12, 2023, and\nJanuary 17, 2023. In response to those requests, on January 20, 2023, KMLT uploaded several\ndocuments to its SharePoint site which was made available to PHMSA. However, much of the\nrequested data, including the pipeline characteristics of the failed pipe and other pipelines at the\nWood River Terminal, remain pending and/or incomplete.\nAs a result of the preliminary investigation, it appears that a condition or conditions exist at the\nWood River Terminal that pose a pipeline integrity risk to public safety, property, or the\nenvironment. Namely, the conditions that led to the December 23, 2022, failure potentially exist\nthroughout the facility, as KMLT has been unable to identify basic information about the\ncharacteristics of the ruptured pipeline and other similar pipeline at the facility. Pursuant to 49\nU.S.C. § 60117(m), PHMSA issues this Notice of Proposed Safety Order, notifying you of the\npreliminary findings of the investigation, and proposing that you take measures to ensure that the\npublic, property, and the environment are protected from the potential risk.\n\n\n\nPreliminary Findings\n• Kinder Morgan, including its subsidiary KMLT, is one of the largest independent\nterminal operators in the country with a network of approximately 140 terminals and\nassociated hazardous liquid pipelines. These pipelines serve primarily to transport liquid\npetroleum products, including gasoline, jet fuel and a variety of distillates across the\ncountry with the majority of the assets in the mid-west and eastern states.\n• The Wood River Terminal was originally owned and operated by British Petroleum (BP)\nbefore it was purchased by KMLT in 2016. During PHMSA’s preliminary investigation\nof the December 23, 2022 failure, KMLT reported to PHMSA that KMLT did not obtain\nconstruction records regarding the Wood River Terminal from BP.\n• The “Affected Facility” is the Wood River Terminal, located in Hartford, Illinois. The\n“Affected Facility Piping” is the PHMSA jurisdictional pipelines located within the\nWood River Terminal. The “Affected Segment” is the failed 12-inch diameter pipeline,\nreferred to by KMLT as the “short suction” line and which connects a Phillips 66 header\nsystem with the Affected Facility’s jurisdictional breakout tanks.\n• The Affected Facility neighbors St. Louis, Missouri, in a High Consequence Area (HCA).\nIt is adjacent to a residential area (immediately east) in Hartford, Illinois, consisting\nprimarily of single-family dwellings. The distance from the closest tank to a residential\narea is approximately 0.1 miles. Additionally, the Mississippi River is approximately 0.8\nmiles to the west. The area also has a high level of heavy industry and is surrounded by\nrefineries, storage facilities, etc.\n• On December 23, 2022, PHMSA’s Accident Investigation Division (AID) was notified\nby the National Response Center (NRC) (Report No. 1355708) of a release of gasoline\nat the Affected Facility. The rupture point in the Affected Segment was located on an\nabove-grade pipeline segment within the tank dike area near breakout tank number107\n(Tank 107). The NRC report indicated an estimated 1,500 gallons (35.7 barrels) of\nproduct had been released. KMLT submitted a supplemental report (Report No. 135714)\non December 23, 2022, adjusting the estimated release volume to 10,000 barrels. KMLT\nadjusted the estimated volume again on December 24, 2022, to 11,500 barrels. KMLT\nlater indicated via email on January 12, 2023, that the final volume released was 11,694\nbarrels.\n1\n• At the time of the release, KMLT had just taken delivery of a gasoline shipment from a\nPhilips 66 refinery, and the Affected Segment was static. The Affected Facility has an\nincoming header system which may route incoming shipments to any of the various\ntanks. KMLT refers to this system as “the Phillips 66 header” with respect to this event.\nKMLT closed the incoming valve at “the Phillips 66 header,” but the Affected Segment\nwas left open to the receiving tank (Tank 268), which subsequently drained into the dike\nfor Tank 107 when the Affected Segment ruptured. The maximum operating pressure\n1 This change was reflected in KMLT’s response to Item 31 PHMSA AID’s December 28, 2022 data request.\n\n\n\n(MOP) of the Affected Segment is 285 pounds per square inch (psi). The Affected\nSegment was operating at 7.6 psig2 at the time of the release.\n• The release began on December 23, 2022 at approximately 2:30 A.M. CST, and was not\nisolated from the source Tank 268 until 6:15 A.M. CST that same day. The tanks are\nelectronically monitored by a Human Machine Interface (HMI). This HMI system\nprovides electronic alarms to the controller responsible for managing the volume in each\ntank. PHMSA’s preliminary investigation indicates the controller failed to recognize and\nact on the alarm, thereby exacerbating the released volume.\n• Local weather conditions at the time of the release were -7 degrees Fahrenheit, with 30\nmph west winds. The soil at this location has a high clay content.\n• PHMSA’s preliminary investigation identified a risk condition of a full circumference,\nincomplete weld penetration at the failed girth weld on the 12-inch diameter line near\nTank 107 (on the Affected Segment).\n• On December 28, 2022, KMLT reported to PHMSA that the company cannot verify\nmany of the pipe characteristics for the Affected Facility Piping, such as installation\ndate, long seam type, pipe grade, pipe manufacturer, pipe diameter, wall thickness,\ncoating type, seam type, etc., as well as past pipeline history and records.\n• The observed condition of the failed girth weld, unknown characteristics of the Affected\nSegment and the Affected Facility Piping, and appearance of similar vintage and\nconstruction for other pipe within the Affected Facility, give rise to concern that other\nwelds within the Affected Facility Piping may have similar weaknesses to those observed\non the Affected Segment.\nProposed Issuance of Safety Order\nSection 60117(m) of Title 49, United States Code, provides for the issuance of a Safety Order,\nafter reasonable notice and the opportunity for a hearing, requiring corrective measures, which\nmay include physical inspection, testing, repair, 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.\nThe rupture at the Affected Facility resulted in a release of 11,694 barrels of gasoline. The release\ncould have resulted in an explosion, deflagration, or fire, which may have impacted the nearby\nresidential area, refineries, and even traffic on the Mississippi River, all of which are proximate to\nthe Affected Facility, as noted above. After evaluating the foregoing preliminary findings of fact\nand considering that KMLT has been unable to provide information regarding the basic\ncharacteristics and material properties of the Affected Facility Piping including age, grade, seam\ntype, MOP, and manufacturer; the hazardous nature of the product transported; the characteristics\n2 Per KMLT response to Item 13 in the December 28, 2022 AID data request.\n\n\n\nof the geographical area where the Affected Facility is located (less than a mile away from both a\nresidential area and a major waterway); and the likelihood that other similar defects exist within\nthe Affected Facility as exist on the Affected Segment; it appears that the continued operation of\nthe Affected Facility without corrective measures would pose a pipeline integrity risk to public\nsafety, 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 Measures\nPursuant to 49 U.S.C. § 60117(m) and 49 C.F.R. § 190.239, PHMSA proposes to issue to KMLT\na Safety Order incorporating the following remedial requirements with respect to the affected\nfacility piping:\n1. Within 10 days of the issuance of the Safety Order, KMLT must complete third-party\nmechanical and metallurgical testing and failure analysis of the failed girth weld and\nsubmit the results to the Director.\n3 KMLT must complete the testing and analysis as\nfollows:\n(A) Document the chain-of-custody when handling and transporting the failed pipe\nsection and other evidence from the Failure site.\n(B) Require the testing laboratory to distribute all reports whether draft or final in their\nentirety to the Director at the same time they are made available to KMLT.\n2. Within 45 days of the issuance of the Safety Order, KMLT must submit to the Director\na detailed inventory of the records for each pipeline within the Affected Facility. The\ninventory must include for each pipeline: pipeline characteristics, year of construction,\npipeline diameter, wall thickness, grade of pipe, coating and seam type, pipeline\nmanufacturer, percent specified minimum yield strength (SMYS), and a validated MOP.\nIf KMLT is unable produce this information via traceable, verifiable, and complete\nrecords, KMLT must submit to the Director a plan for identifying and verifying the\nproperties listed above in this Item. The plan must address how KMLT will acquire or\ncreate records verifying the missing information, including through field testing or other\nmethods.\n3. Within 60 days of the issuance of the Safety Order, develop, and submit to the Director\nfor approval a written remedial work plan (Work Plan) that includes corrective measures.\nThe Work Plan must include:\n3 PHMSA is aware that KMLT has already begun this process on January 12, 2023, when PHMSA reviewed and\napproved the metallurgical testing protocol that is being performed by IrisNDT. Testing will include visual\nexaminations, hardness and other measurements, non-destructive testing, fractographic examination, metallographic\nexamination, mechanical testing, and chemical analysis.\n\n\n\n(A) The performance of additional field and metallurgical testing, inspections, and\nevaluations to determine whether and to what extent the conditions described in\nthis Notice are present elsewhere in the Affected Facility. Make the results of the\ninspections, field excavations, and evaluations available to PHMSA or its\nrepresentative;\n(B) The performance of repairs or other corrective measures that fully remediate the\nidentified risk condition(s) on the Affected Facility Piping. Include provisions for\ncontinuing long-term periodic testing and integrity verification measures to ensure\nthe ongoing safe operation of the pipeline considering the results of the analyses,\ninspections, and corrective measures undertaken pursuant to the Safety Order; and\n(C) A proposed schedule for completion of the actions required by paragraphs (A) and\n(B) of this Item.\n4. KMLT must revise the Work Plan to incorporate new information obtained during the\nevaluations and associated remedial activities. Any such plan revisions must be\nsubmitted to the Director for prior approval.\n5. The Director may approve plan elements incrementally. The Work Plan shall become\nincorporated into the Safety Order.\n6. Implement the Work Plan as it is approved by the Director, including any revisions to\nthe Work Plan.\n7. Submit quarterly reports to the Director that: (1) include available data and results of the\ntesting and evaluations required by the Safety Order; and (2) describe the progress of the\nrepairs and other remedial actions being undertaken.\n8. The Director may grant an extension of time for compliance with any of the terms of the\nSafety Order upon a written request timely submitted demonstrating good cause for an\nextension.\n9. It is requested (not mandated) that KMLT maintain documentation of the safety\nimprovement costs associated with fulfilling this Safety Order and submit the total to\nRobert Burrough, Director, Eastern Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: (1) total\ncost associated with preparation/revision of plans, procedures, studies, and analyses,\nand (2) total cost associated with replacements, additions, and other changes to pipeline\ninfrastructure.\nThe actions proposed by this Notice of Proposed Safety Order are in addition to and do not waive\nany requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190 through\n199, under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et seq., or\nunder any other provision of Federal or state law.\n\n\n\nAfter receiving and analyzing additional data in the course of this proceeding and implementation\nof the Work Plan, PHMSA may identify other safety measures that need to be taken. In that event,\nRespondent will be notified of any proposed additional measures and, if necessary, amendments\nto the Work Plan or Safety Order.\nRespondent may appeal any decision of the Director to the Associate Administrator for Pipeline\nSafety. Decisions of the Associate Administrator shall be final.\nResponse to this Notice\nIn accordance with § 190.239, you have 30 days following receipt of this Notice to submit a\nwritten response to the official who issued the Notice. If you do not respond within 30 days, this\nconstitutes a waiver of your right to contest this Notice and authorizes the Associate\nAdministrator for Pipeline Safety to find facts as alleged in this Notice without further notice to\nyou and to issue a Safety Order. In your response, you may notify that official that you intend to\ncomply with the terms of the Notice as proposed, or you may request that an informal\nconsultation be scheduled (you will also have the opportunity to request an administrative\nhearing before a Safety Order is issued). Informal consultation provides you with the\nopportunity to explain the circumstances associated with the risk condition(s) alleged in the\nnotice and, as appropriate, to present a proposal for a work plan or other remedial measures,\nwithout prejudice to your position in any subsequent hearing.\nIf you and PHMSA agree within 30 days of informal consultation on a plan and schedule for you\nto address each identified risk condition, we may enter into a written consent agreement\n(PHMSA would then issue an administrative consent order incorporating the terms of the\nagreement). If a consent agreement is not reached, or if you have elected not to request informal\nconsultation, you may request an administrative hearing in writing within 30 days following\nreceipt of the Notice or within 10 days following the conclusion of an informal consultation that\ndid not result in a consent agreement, as applicable. Following a hearing, if the Associate\nAdministrator finds the facility to have a condition that poses a pipeline integrity risk to the\npublic, property, or the environment in accordance with § 190.239, the Associate Administrator\nmay issue a Safety Order\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\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b).\nIn your correspondence on this matter, please refer to CPF 1-2023-001-NOPSO and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\n\n\n\n___________________________________ __________________\nRobert Burrough Date issued\nDirector, Eastern Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\n\n12023001NOPSO_Consent Agreement and Order_09292023_(22-263035)_text.pdf\n\nSeptember 29, 2023\nVIA ELECTRONIC MAIL TO: john schlosser@kindermorgan.com\nMr. John Schlosser\nPresident, Terminals\nKinder Morgan Liquid Terminals, LLC\n1001 Louisiana Street, Suite 1000\nHouston, Texas 77002\nCPF No. 1-2023-001-NOPSO\nDear Mr. Schlosser:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement\nbetween the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Kinder\nMorgan Liquid Terminals, LLC, which was executed on September 26, 2023. Service of the\nConsent Order and Consent Agreement by electronic mail is deemed effective upon the date of\ntransmission and acknowledgement of receipt, or otherwise as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure: Order and Consent Agreement\ncc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, Office of\nPipeline Safety, PHMSA\nMr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMs. Annie Cook, Esq., Bracewell LLP, Outside Counsel for Kinder Morgan Liquid\nTerminals, LLC, annie.cook@bracewell.com\n\n\n\nMr. Joshua Etzel, Vice President, Operations and Engineering, Kinder Morgan Liquid Terminals,\nLLC, joshua_etzel@kindermorgan.com\nMr. Jaime Hernandez, Director, Engineering: Codes and Standards, Kinder Morgan Liquid\nTerminals, LLC, jaime_hernandez@kindermorgan.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____________________________________\n)\nIn the Matter of )\n)\nKinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2023-001-NOPSO\n)\nRespondent. )\n____________________________________)\nCONSENT ORDER\nBy letter dated February 23, 2023, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety, issued a Notice of Proposed Safety Order (Notice) to\nKinder Morgan Liquid Terminals, LLC’s (KMLT or Respondent).\nIn accordance with 49 C.F.R. § 190.239, the Notice alleged that conditions exist at\nRespondent’s Wood River Terminal in Hartford, Illinois, that pose an 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, whereupon the parties\nengaged in good-faith settlement discussions that have resulted in the Consent Agreement\nattached to this Consent Order that settles all of the allegations 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\nthe assessment of civil penalties as set forth in 49 U.S.C. § 60122 and 49 C.F.R. § 190.223, or in\nreferral to the Attorney General for appropriate relief in a district court of the United States.\nThe terms and conditions of this Consent Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nSeptember 29, 2023\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nKinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2023-001-NOPSO\n)\nRespondent. )\n____________________________________)\nCONSENT AGREEMENT\nPursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), Office of Pipeline Safety (OPS), initiated an investigation of\nthe pipeline system of Kinder Morgan Liquid Terminals, LLC (Respondent or KMLT) Wood\nRiver Terminal in Hartford, Illinois. The Wood River Terminal is owned by KM Phoenix Holdings\nLLC and operated by KMLT, since acquisition of the terminal in 2016. PHMSA initiated its\ninvestigation in response to a December 23, 2022, release of 11,694 barrels of gasoline at the Wood\nRiver Terminal, all of which was fully contained within the Terminal’s secondary containment. The\nrelease occurred after the failure of a girth weld on an above-grade short suction 12-inch pipeline\nsegment at the Wood River Terminal, in an area of the Terminal that was originally constructed in\nthe 1950s. In response to the release, KMLT tagged and locked out a portion of the short suction\nsegment in proximity to the failure. Pending further evaluation, the entire short suction pipeline\n(defined in Section II.) has now been taken out of service, with the line tagged, locked out, and\ndrained.\nAs a result of the investigation, the Director, Eastern Region, OPS (Director), issued to\nRespondent, by letter dated February 23, 2023, a Notice of Proposed Safety Order (Notice). The\nNotice alleged that conditions exist on Respondent’s pipeline system that pose a pipeline\nintegrity risk to public safety, property, or the environment. The Notice also proposed that\nKMLT take certain corrective measures to remedy the alleged conditions and ensure that the\npublic, property, and the environment are protected from the alleged integrity risk.\nOn March 22, 2023, KMLT responded to the Notice by timely submitting a request for an\ninformal consultation under 49 C.F.R. § 190.239(b)(2). Multiple informal consultation meetings\nwere held beginning on April 13, 2023.\nAs a result of the informal consultation, PHMSA and Respondent (the Parties) agree that\nsettlement of this proceeding by entry into this Consent Agreement (Agreement) is the most\nappropriate means of resolving the issues raised in the Notice, will avoid further administrative\n\n\n\nproceedings or litigation, and is in the public interest. Therefore, pursuant to 49 C.F.R. §\n190.239(b)(2), without adjudication of any issue of law or fact, and upon consent and agreement,\nthe Parties agree to the following terms and conditions.\nI. General Provisions\n1. Respondent acknowledges that as the operator of the pipeline facilities subject to\nthe Notice, Respondent and its referenced pipeline facilities are subject to the jurisdiction of the\nFederal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and administrative\norders issued thereunder. For purposes of this Agreement, Respondent acknowledges that it\nreceived proper notice of PHMSA’s action in this proceeding and that the Notice states claims\nupon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq., and the regulations and\norders issued thereunder.\n2. Respondent agrees, for purposes of this Agreement, to address the integrity risks\nidentified in the Notice by completing the actions specified in Section II of this Agreement\n(Corrective Measures) and to abide by the terms of this Agreement.\n3. After Respondent returns this signed Agreement to PHMSA, the Agency’s\nrepresentative will present it to the Associate Administrator for Pipeline Safety, recommending\nthat the Associate Administrator adopt the terms of this Agreement by issuing an administrative\norder (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement\nconstitute an offer of settlement until accepted by the Associate Administrator. Once accepted,\nthe Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.\n4. Respondent consents to the issuance of the Consent Order, and hereby waives any\nfurther procedural requirements with respect to its issuance. Respondent waives all rights to\ncontest the adequacy of notice, or the validity of the Consent Order or this Agreement, including\nall rights to administrative or judicial hearings or appeals, except as set forth herein.\n5. This Agreement shall apply to and be binding upon PHMSA and Respondent, its\nofficers, directors, and employees, and its successors, assigns, or other entities or persons\notherwise bound by law. Respondent agrees to provide a copy of this Agreement and any\nincorporated work plans and schedules to all of Respondent’s officers, employees, and agents\nwhose duties might reasonably include compliance with this Agreement.\n6. For all transfers of ownership or operating responsibility of Respondent’s pipeline\nsystem referenced herein, Respondent will provide a copy of this Agreement to the prospective\ntransferee at least 30 days prior to such transfer. Respondent will provide written notice of the\ntransfer to the Director no later than 60 days after the transfer occurs.\n7. This Agreement constitutes the final, complete and exclusive agreement and\nunderstanding between the Parties with respect to the settlement embodied in this Agreement.\nThe Parties acknowledge that there are no representations, agreements or understandings relating\nto settlement other than those expressly contained in this Agreement, except that the terms of this\nAgreement may be construed by reference to the Notice.\n\n\n\n8. Nothing in this Agreement affects or relieves Respondent of its responsibility to\ncomply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,\net seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters\nPHMSA's right of access, entry, inspection, and information gathering or PHMSA's authority to\nbring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the\nregulations and orders issued 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\nregulations that are applicable to Respondent’s pipeline systems. This Agreement is not a\npermit, or a modification of any permit, under any Federal, State, or local laws or regulations.\nRespondent remains responsible for achieving and maintaining compliance with all applicable\nFederal, State, and local laws, regulations and permits.\n10. This Agreement does not create rights in, or grant any cause of action to, any third\nparty not party to this Agreement. The U.S. Department of Transportation is not liable for any\ninjuries or damages to persons or property arising from acts or omissions of Respondent or its\nofficers, employees, or agents carrying out the work required by this Agreement. Respondent\nagrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,\nand representatives from any and all causes of action arising from any acts or omissions of\nRespondent or its contractors in carrying out any work required by this Agreement.\n11. This Agreement does not constitute a finding of violation of any Federal law or regulation\nand may not be used in any civil or administrative proceeding of any kind as evidence or proof of\nany fact, fault, or liability, or as evidence of the violation of any law, rule, regulation, or\nrequirement, except in a proceeding to enforce the provisions of this Agreement. Respondent does\nnot admit or deny the alleged integrity risks identified in the Notice, but agrees, for purposes of this\nAgreement, to address the alleged integrity risks identified in the Notice by completed the actions\nspecified in Section II. of this Agreement (Corrective Measures) and to abide by the terms of this\nAgreement.\nII. Corrective Measures:\n12. Upon issuance of the Consent Order, Respondent agrees to perform the\nCorrective Measures set forth below.\n13. Definitions:\n(A). “Director” means the Director, Eastern Region, OPS;\n(B). “Effective Date” means the date on which the Consent Order is issued by the\nAssociate Administrator, PHMSA, incorporating the terms of this Agreement;\n(C). “Affected Facility” means PHMSA jurisdictional pipeline assets at the Wood\nRiver Terminal operated by KMLT;\n\n\n\n(D). “Wood River Terminal MOP Determination Procedure” means the KMLT Site\nSpecific Procedure (SSP) previously approved by PHMSA; and\n(E). “Short Suction Segment” means from the most southern flange within\ncontainment of the empty tank bottom south of breakout tank 107, to the most northern\nflange within containment of breakout tank 205.\n14. Mechanical and Metallurgical Analysis. The Notice proposed KMLT must\nconduct testing and failure analysis of the failed girth weld and submit the results to the Director\n(proposed corrective measure No. 1 in the Notice). On April 28, 2023, KMLT provided the\nDirector a “Final Metallurgical Report and Chain of Custody” document addressing the failed girth\nweld. The Parties agree proposed corrective measure No. 1 in the Notice has been completed.\n15. Testing and MOP Validation of Short Suction Segment. Within 30 days of the\nEffective Date, KMLT must complete the planned non-destructive examination (NDE) phased\narray testing and stress analysis on the 12-inch diameter Short Suction Segment on which the\nDecember 23, 2022, failure occurred. Prior to resuming service on the Short Suction Segment,\nKMLT shall:\n(A) and pipe grade;\nPerform ultrasonic testing and other appropriate NDE to determine wall thickness\n(B) Determine the internal design pressure of the segment under 49 C.F.R. § 195.106;\nand,\n(C) Validate the maximum operating pressure (MOP) and the percent of specified\nminimum yield strength (SMYS) at which this segment operates pursuant to KMLT’s Wood River\nTerminal MOP Determination Procedure.\nKMLT must seek the Director’s prior approval for its plan to determine the internal design pressure\nand to validate the MOP and percent of SMYS for this segment. Within 60 days of the Director’s\napproval, KMLT must submit to the Director the results of such testing and analysis, and include\nthe results of its review of historical information obtained from the prior operator if relevant\nrecords are located. The additional analysis in (A), (B), and (C) is not required if KMLT elects to\npermanently remove the Short Suction Segment from service through abandonment under Part\n195.\n16. Pipeline Inventory and MOP Validation. Within 90 days of the Effective Date,\nKMLT must submit to the Director a detailed inventory of the records for each pipeline1 within\nthe entire Affected Facility (except as provided in paragraph 15). The inventory must include for\neach pipeline: pipeline diameter, wall thickness, coating and seam type, percent SMYS, and a\nvalidated MOP. If KMLT is unable produce certain information via traceable, verifiable, and\ncomplete records, KMLT must submit to the Director for approval a plan for identifying and\n1 PHMSA jurisdictional pipeline segments and their components.\n\n\n\nverifying the properties listed above in this paragraph, to include the determination of internal\ndesign pressures and validation of MOP and percent of SMYS pursuant to KMLT’s Wood River\nTerminal MOP Determination Procedure. The plan must address how KMLT will acquire or\ncreate records verifying the missing information, including through the use of conservative\nassumptions and/or additional field testing or other methods and the timeline for completion of\nsuch. The records verifying the missing information must be provided no later than 120 days after\nthe Effective Date, unless modified pursuant to paragraph 23. Where available in historical\nrecords, KMLT will provide pipeline year of construction, grade of pipe, and pipeline\nmanufacturer.\n17. Remedial Work Plan. Within 30 days of submitting the detailed inventory of the\nrecords in paragraph 16, KMLT must submit to the Director for approval a written remedial work\nplan (Work Plan) that includes any necessary corrective measures. The Work Plan must include\nprovisions that address:\n(A) The performance of potential additional field and/or metallurgical testing,\ninspections, and/or evaluations – if warranted – to determine whether and to what extent the\nconditions described in the Notice are present elsewhere in the Affected Facility;\n(B) The performance of repairs or other corrective measures that fully remediate the\nidentified risk condition(s) on the Affected Facility piping. Include provisions for continuing long-\nterm periodic testing and integrity verification measures to ensure the ongoing safe operation of\nthe pipeline considering the results of the analyses, inspections, and corrective measures\nundertaken pursuant to the Agreement; and,\n(C) (B) of this paragraph 17.\nA proposed schedule for completion of the actions required by paragraphs (A) and\n18. KMLT must revise the Work Plan to incorporate new information obtained during\nthe evaluations and associated remedial activities. Any such plan revisions must be submitted to\nthe Director for prior approval.\n19. become incorporated into this Agreement.\nThe Director may approve Work Plan elements incrementally. The Work Plan shall\n20. Implement the Work Plan as it is approved by the Director, including any revisions\nto the Work Plan that may become necessary.\n21. Quarterly Reports. Submit quarterly reports to the Director that: (1) include\navailable data and results of the testing and evaluations; and (2) describe the progress of the repairs\nand other remedial actions being undertaken.\n22. Documentation of Costs. It is requested (not mandated) that KMLT maintain\ndocumentation of the safety improvement costs associated with fulfilling this Agreement and\nsubmit the total to the Director. It is requested that these costs be reported in two categories: (1)\ntotal cost associated with preparation/revision of plans, procedures, studies, and analyses, and (2)\n\n\n\ntotal cost associated with replacements, additions, and other changes to pipeline infrastructure.\n23. Extensions of Time. The Director may grant an extension of time for compliance\nwith any of the terms of the Agreement upon a written request timely submitted demonstrating\ngood cause for the extension. The Director shall respond in writing to any such request.\nIII. Review and Approval Process:\n24. With respect to any submission under Section II (Corrective Measures) of this\nAgreement that requires the approval of the Director, the Director may: (a) approve, in whole or\nin part, the submission; (b) approve the submission on specified, reasonable conditions; (c)\ndisapprove, in whole or in part, the submission; or (d) any combination of the foregoing. If the\nDirector approves, approves in part, or approves with conditions, Respondent will take all\nactions as approved by the Director, subject to Respondent’s right to invoke the dispute\nresolution procedures with respect to any conditions the Director identifies. If the Director\ndisapproves all or any portion of the submission, the Director will provide Respondent a written\nnotice of the deficiencies. Respondent will correct all deficiencies within the time specified by\nthe Director and resubmit it for approval.\nIV. Dispute Resolution:\n25. The Director and Respondent will informally attempt to resolve any disputes\narising under this Agreement, including any decision of the Director under the terms of Section\nII (Corrective Measures). If Respondent and the Director are unable to informally resolve the\ndispute within 15 calendar days after the dispute is first raised, in writing, to the Director,\nRespondent may submit a written request for a determination resolving the dispute from the\nAssociate Administrator for Pipeline Safety, PHMSA. Such request must be made in writing and\nprovided to the Director, counsel for Eastern Region, and to the Associate Administrator for\nPipeline Safety, no later than 10 calendar days from the 15-day deadline for informal resolution\nreferenced in this paragraph. Along with its request, Respondent must provide the Associate\nAdministrator with all information Respondent believes is relevant to the dispute. Decisions of\nthe Associate Administrator under this paragraph will constitute final agency action. The\nexistence of a dispute and PHMSA’s consideration of matters placed in dispute will not excuse,\ntoll, or suspend any term or timeframe for completion of any work to be performed under this\nAgreement during the pendency of the dispute resolution process except as agreed by the\nDirector or the Associate Administrator in writing.\nV. Enforcement:\n26. This Agreement is subject to all enforcement authorities available to PHMSA\nunder 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190, including administrative civ","truncated":true,"body_characters":42979}