# KINDER MORGAN LIQUID TERMINALS, LLC — Safety Order

- **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:** Not available
- **summary:** OPEN safety order.
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- **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.

Official case documents:

12023001NOPSO_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

12023001NOPSO_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

12023001NOPSO_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

12023001NOPSO_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

12023001NOPSO_Notice of Proposed Safety Order_02232023_(22-263035)_text.pdf

OVERNIGHT EXPRESS DELIVERY
February 23, 2023
Mr. John Schlosser
President and Chief Executive Officer
Kinder Morgan Liquid Terminals LLC
1001 Louisiana Street, Suite 1000
Houston, Texas 77002
CPF 1-2023-001-NOPSO
Dear Mr. Schlosser:
Enclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.
The Notice proposes that you take certain measures with respect to your Wood River Terminal in
Hartford, Illinois to ensure pipeline safety. Your options for responding are set forth in the Notice.
Your receipt of the Notice constitutes service of that document under 49 C.F.R. § 190.5.
We look forward to a successful resolution to ensure pipeline safety. Please direct any
questions on this matter to me at 609-771-7809.
Sincerely,
Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration
Enclosure: Notice of Proposed Safety Order
49 C.F.R. § 190.239
Cc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, Office of
Pipeline Safety <linda.daugherty@dot.gov>
Mr. Joshua Etzel, VP Operations and Engineering, Kinder Morgan Liquid Terminals,
LLC < joshua_etzel@kindermorgan.com>



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
EASTERN REGION
WEST TRENTON, NJ 08628
____________________________________
)
In the Matter of )
)
Kinder Morgan Liquid Terminals, LLC ) CPF No. 1-2023-001-NOPSO
)
Respondent )
____________________________________)
NOTICE OF PROPOSED SAFETY ORDER
Background and Purpose
Pursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials
Safety Administration (PHMSA) has initiated an investigation and on-site inspection of the safety
of Kinder Morgan Liquid Terminals, LLC’s (KMLT) Wood River Terminal in Hartford, Illinois.
PHMSA initiated its investigation in response to a December 23, 2022, release of 11,694 barrels
of gasoline at the Wood River Terminal. The release occurred after an above-grade pipeline
segment at the Wood River Terminal ruptured. PHMSA submitted a data request to KMLT on
December 28, 2022, and follow-up inquiries related to the data request on January 12, 2023, and
January 17, 2023. In response to those requests, on January 20, 2023, KMLT uploaded several
documents to its SharePoint site which was made available to PHMSA. However, much of the
requested data, including the pipeline characteristics of the failed pipe and other pipelines at the
Wood River Terminal, remain pending and/or incomplete.
As a result of the preliminary investigation, it appears that a condition or conditions exist at the
Wood River Terminal that pose a pipeline integrity risk to public safety, property, or the
environment. Namely, the conditions that led to the December 23, 2022, failure potentially exist
throughout the facility, as KMLT has been unable to identify basic information about the
characteristics of the ruptured pipeline and other similar pipeline at the facility. Pursuant to 49
U.S.C. § 60117(m), PHMSA issues this Notice of Proposed Safety Order, notifying you of the
preliminary findings of the investigation, and proposing that you take measures to ensure that the
public, property, and the environment are protected from the potential risk.



Preliminary Findings
• Kinder Morgan, including its subsidiary KMLT, is one of the largest independent
terminal operators in the country with a network of approximately 140 terminals and
associated hazardous liquid pipelines. These pipelines serve primarily to transport liquid
petroleum products, including gasoline, jet fuel and a variety of distillates across the
country with the majority of the assets in the mid-west and eastern states.
• The Wood River Terminal was originally owned and operated by British Petroleum (BP)
before it was purchased by KMLT in 2016. During PHMSA’s preliminary investigation
of the December 23, 2022 failure, KMLT reported to PHMSA that KMLT did not obtain
construction records regarding the Wood River Terminal from BP.
• The “Affected Facility” is the Wood River Terminal, located in Hartford, Illinois. The
“Affected Facility Piping” is the PHMSA jurisdictional pipelines located within the
Wood River Terminal. The “Affected Segment” is the failed 12-inch diameter pipeline,
referred to by KMLT as the “short suction” line and which connects a Phillips 66 header
system with the Affected Facility’s jurisdictional breakout tanks.
• The Affected Facility neighbors St. Louis, Missouri, in a High Consequence Area (HCA).
It is adjacent to a residential area (immediately east) in Hartford, Illinois, consisting
primarily of single-family dwellings. The distance from the closest tank to a residential
area is approximately 0.1 miles. Additionally, the Mississippi River is approximately 0.8
miles to the west. The area also has a high level of heavy industry and is surrounded by
refineries, storage facilities, etc.
• On December 23, 2022, PHMSA’s Accident Investigation Division (AID) was notified
by the National Response Center (NRC) (Report No. 1355708) of a release of gasoline
at the Affected Facility. The rupture point in the Affected Segment was located on an
above-grade pipeline segment within the tank dike area near breakout tank number107
(Tank 107). The NRC report indicated an estimated 1,500 gallons (35.7 barrels) of
product had been released. KMLT submitted a supplemental report (Report No. 135714)
on December 23, 2022, adjusting the estimated release volume to 10,000 barrels. KMLT
adjusted the estimated volume again on December 24, 2022, to 11,500 barrels. KMLT
later indicated via email on January 12, 2023, that the final volume released was 11,694
barrels.
1
• At the time of the release, KMLT had just taken delivery of a gasoline shipment from a
Philips 66 refinery, and the Affected Segment was static. The Affected Facility has an
incoming header system which may route incoming shipments to any of the various
tanks. KMLT refers to this system as “the Phillips 66 header” with respect to this event.
KMLT closed the incoming valve at “the Phillips 66 header,” but the Affected Segment
was left open to the receiving tank (Tank 268), which subsequently drained into the dike
for Tank 107 when the Affected Segment ruptured. The maximum operating pressure
1 This change was reflected in KMLT’s response to Item 31 PHMSA AID’s December 28, 2022 data request.



(MOP) of the Affected Segment is 285 pounds per square inch (psi). The Affected
Segment was operating at 7.6 psig2 at the time of the release.
• The release began on December 23, 2022 at approximately 2:30 A.M. CST, and was not
isolated from the source Tank 268 until 6:15 A.M. CST that same day. The tanks are
electronically monitored by a Human Machine Interface (HMI). This HMI system
provides electronic alarms to the controller responsible for managing the volume in each
tank. PHMSA’s preliminary investigation indicates the controller failed to recognize and
act on the alarm, thereby exacerbating the released volume.
• Local weather conditions at the time of the release were -7 degrees Fahrenheit, with 30
mph west winds. The soil at this location has a high clay content.
• PHMSA’s preliminary investigation identified a risk condition of a full circumference,
incomplete weld penetration at the failed girth weld on the 12-inch diameter line near
Tank 107 (on the Affected Segment).
• On December 28, 2022, KMLT reported to PHMSA that the company cannot verify
many of the pipe characteristics for the Affected Facility Piping, such as installation
date, long seam type, pipe grade, pipe manufacturer, pipe diameter, wall thickness,
coating type, seam type, etc., as well as past pipeline history and records.
• The observed condition of the failed girth weld, unknown characteristics of the Affected
Segment and the Affected Facility Piping, and appearance of similar vintage and
construction for other pipe within the Affected Facility, give rise to concern that other
welds within the Affected Facility Piping may have similar weaknesses to those observed
on the Affected Segment.
Proposed Issuance of Safety Order
Section 60117(m) of Title 49, United States Code, provides for the issuance of a Safety Order,
after reasonable notice and the opportunity for a hearing, requiring corrective measures, which
may include physical inspection, testing, repair, or other action, as appropriate. The basis for
making the determination that a pipeline facility has a condition or conditions that pose a pipeline
integrity risk to public safety, property, or the environment is set forth both in the above-referenced
statute and 49 C.F.R. § 190.239, a copy of which is enclosed.
The rupture at the Affected Facility resulted in a release of 11,694 barrels of gasoline. The release
could have resulted in an explosion, deflagration, or fire, which may have impacted the nearby
residential area, refineries, and even traffic on the Mississippi River, all of which are proximate to
the Affected Facility, as noted above. After evaluating the foregoing preliminary findings of fact
and considering that KMLT has been unable to provide information regarding the basic
characteristics and material properties of the Affected Facility Piping including age, grade, seam
type, MOP, and manufacturer; the hazardous nature of the product transported; the characteristics
2 Per KMLT response to Item 13 in the December 28, 2022 AID data request.



of the geographical area where the Affected Facility is located (less than a mile away from both a
residential area and a major waterway); and the likelihood that other similar defects exist within
the Affected Facility as exist on the Affected Segment; it appears that the continued operation of
the Affected Facility without corrective measures would pose a pipeline integrity risk to public
safety, property, or the environment.
Accordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the
proposed issuance of a Safety Order and to propose that Respondent take measures specified herein
to address the potential risk.
Proposed Corrective Measures
Pursuant to 49 U.S.C. § 60117(m) and 49 C.F.R. § 190.239, PHMSA proposes to issue to KMLT
a Safety Order incorporating the following remedial requirements with respect to the affected
facility piping:
1. Within 10 days of the issuance of the Safety Order, KMLT must complete third-party
mechanical and metallurgical testing and failure analysis of the failed girth weld and
submit the results to the Director.
3 KMLT must complete the testing and analysis as
follows:
(A) Document the chain-of-custody when handling and transporting the failed pipe
section and other evidence from the Failure site.
(B) Require the testing laboratory to distribute all reports whether draft or final in their
entirety to the Director at the same time they are made available to KMLT.
2. Within 45 days of the issuance of the Safety Order, KMLT must submit to the Director
a detailed inventory of the records for each pipeline within the Affected Facility. The
inventory must include for each pipeline: pipeline characteristics, year of construction,
pipeline diameter, wall thickness, grade of pipe, coating and seam type, pipeline
manufacturer, percent specified minimum yield strength (SMYS), and a validated MOP.
If KMLT is unable produce this information via traceable, verifiable, and complete
records, KMLT must submit to the Director a plan for identifying and verifying the
properties listed above in this Item. The plan must address how KMLT will acquire or
create records verifying the missing information, including through field testing or other
methods.
3. Within 60 days of the issuance of the Safety Order, develop, and submit to the Director
for approval a written remedial work plan (Work Plan) that includes corrective measures.
The Work Plan must include:
3 PHMSA is aware that KMLT has already begun this process on January 12, 2023, when PHMSA reviewed and
approved the metallurgical testing protocol that is being performed by IrisNDT. Testing will include visual
examinations, hardness and other measurements, non-destructive testing, fractographic examination, metallographic
examination, mechanical testing, and chemical analysis.



(A) The performance of additional field and metallurgical testing, inspections, and
evaluations to determine whether and to what extent the conditions described in
this Notice are present elsewhere in the Affected Facility. Make the results of the
inspections, field excavations, and evaluations available to PHMSA or its
representative;
(B) The performance of repairs or other corrective measures that fully remediate the
identified risk condition(s) on the Affected Facility Piping. Include provisions for
continuing long-term periodic testing and integrity verification measures to ensure
the ongoing safe operation of the pipeline considering the results of the analyses,
inspections, and corrective measures undertaken pursuant to the Safety Order; and
(C) A proposed schedule for completion of the actions required by paragraphs (A) and
(B) of this Item.
4. KMLT must revise the Work Plan to incorporate new information obtained during the
evaluations and associated remedial activities. Any such plan revisions must be
submitted to the Director for prior approval.
5. The Director may approve plan elements incrementally. The Work Plan shall become
incorporated into the Safety Order.
6. Implement the Work Plan as it is approved by the Director, including any revisions to
the Work Plan.
7. Submit quarterly reports to the Director that: (1) include available data and results of the
testing and evaluations required by the Safety Order; and (2) describe the progress of the
repairs and other remedial actions being undertaken.
8. The Director may grant an extension of time for compliance with any of the terms of the
Safety Order upon a written request timely submitted demonstrating good cause for an
extension.
9. It is requested (not mandated) that KMLT maintain documentation of the safety
improvement costs associated with fulfilling this Safety Order and submit the total to
Robert Burrough, Director, Eastern Region, Pipeline and Hazardous Materials Safety
Administration. It is requested that these costs be reported in two categories: (1) total
cost associated with preparation/revision of plans, procedures, studies, and analyses,
and (2) total cost associated with replacements, additions, and other changes to pipeline
infrastructure.
The actions proposed by this Notice of Proposed Safety Order are in addition to and do not waive
any requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190 through
199, under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et seq., or
under any other provision of Federal or state law.



After receiving and analyzing additional data in the course of this proceeding and implementation
of the Work Plan, PHMSA may identify other safety measures that need to be taken. In that event,
Respondent will be notified of any proposed additional measures and, if necessary, amendments
to the Work Plan or Safety Order.
Respondent may appeal any decision of the Director to the Associate Administrator for Pipeline
Safety. Decisions of the Associate Administrator shall be final.
Response to this Notice
In accordance with § 190.239, you have 30 days following receipt of this Notice to submit a
written response to the official who issued the Notice. If you do not respond within 30 days, this
constitutes a waiver of your right to contest this Notice and authorizes the Associate
Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to
you and to issue a Safety Order. In your response, you may notify that official that you intend to
comply with the terms of the Notice as proposed, or you may request that an informal
consultation be scheduled (you will also have the opportunity to request an administrative
hearing before a Safety Order is issued). Informal consultation provides you with the
opportunity to explain the circumstances associated with the risk condition(s) alleged in the
notice and, as appropriate, to present a proposal for a work plan or other remedial measures,
without prejudice to your position in any subsequent hearing.
If you and PHMSA agree within 30 days of informal consultation on a plan and schedule for you
to address each identified risk condition, we may enter into a written consent agreement
(PHMSA would then issue an administrative consent order incorporating the terms of the
agreement). If a consent agreement is not reached, or if you have elected not to request informal
consultation, you may request an administrative hearing in writing within 30 days following
receipt of the Notice or within 10 days following the conclusion of an informal consultation that
did not result in a consent agreement, as applicable. Following a hearing, if the Associate
Administrator finds the facility to have a condition that poses a pipeline integrity risk to the
public, property, or the environment in accordance with § 190.239, the Associate Administrator
may issue a Safety Order
Be advised that all material you submit in response to this enforcement action is subject to being
made publicly available. If you believe that any portion of your responsive material qualifies for
confidential treatment under 5 U.S.C. 552(b), along with the complete original document you
must provide a second copy of the document with the portions you believe qualify for
confidential treatment redacted and an explanation of why you believe the redacted information
qualifies for confidential treatment under 5 U.S.C. 552(b).
In your correspondence on this matter, please refer to CPF 1-2023-001-NOPSO and for each
document you submit, please provide a copy in electronic format whenever possible.



___________________________________ __________________
Robert Burrough Date issued
Director, Eastern Region, Office of Pipeline Safety
Pipeline and Hazardous Materials Safety Administration

12023001NOPSO_Consent Agreement and Order_09292023_(22-263035)_text.pdf

September 29, 2023
VIA ELECTRONIC MAIL TO: john schlosser@kindermorgan.com
Mr. John Schlosser
President, Terminals
Kinder Morgan Liquid Terminals, LLC
1001 Louisiana Street, Suite 1000
Houston, Texas 77002
CPF No. 1-2023-001-NOPSO
Dear Mr. Schlosser:
Enclosed please find a Consent Order incorporating the terms of the Consent Agreement
between the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Kinder
Morgan Liquid Terminals, LLC, which was executed on September 26, 2023. Service of the
Consent Order and Consent Agreement by electronic mail is deemed effective upon the date of
transmission and acknowledgement of receipt, or otherwise as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure: Order and Consent Agreement
cc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, Office of
Pipeline Safety, PHMSA
Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Ms. Annie Cook, Esq., Bracewell LLP, Outside Counsel for Kinder Morgan Liquid
Terminals, LLC, annie.cook@bracewell.com



Mr. Joshua Etzel, Vice President, Operations and Engineering, Kinder Morgan Liquid Terminals,
LLC, joshua_etzel@kindermorgan.com
Mr. Jaime Hernandez, Director, Engineering: Codes and Standards, Kinder Morgan Liquid
Terminals, LLC, jaime_hernandez@kindermorgan.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Kinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2023-001-NOPSO
)
Respondent. )
____________________________________)
CONSENT ORDER
By letter dated February 23, 2023, the Pipeline and Hazardous Materials Safety Administration
(PHMSA), Office of Pipeline Safety, issued a Notice of Proposed Safety Order (Notice) to
Kinder Morgan Liquid Terminals, LLC’s (KMLT or Respondent).
In accordance with 49 C.F.R. § 190.239, the Notice alleged that conditions exist at
Respondent’s Wood River Terminal in Hartford, Illinois, that pose an integrity risk to public
safety, property, or the environment. The Notice also proposed that Respondent take certain
corrective measures to remedy the alleged conditions and ensure that the public, property, and
the environment are protected from the potential risk.
In response to the Notice, Respondent requested an informal consultation, whereupon the parties
engaged in good-faith settlement discussions that have resulted in the Consent Agreement
attached to this Consent Order that settles all of the allegations in the Notice.
Accordingly, the Consent Agreement is hereby approved and incorporated by reference into this
Consent Order. The Respondent is hereby ordered to comply with the terms of the Consent
Agreement, effective immediately.
Pursuant to 49 U.S.C. § 60101, et seq., failure to comply with this Consent Order may result in
the assessment of civil penalties as set forth in 49 U.S.C. § 60122 and 49 C.F.R. § 190.223, or in
referral to the Attorney General for appropriate relief in a district court of the United States.
The terms and conditions of this Consent Order are effective upon service in accordance with
49 C.F.R. § 190.5.
September 29, 2023
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Kinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2023-001-NOPSO
)
Respondent. )
____________________________________)
CONSENT AGREEMENT
Pursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials
Safety Administration (PHMSA), Office of Pipeline Safety (OPS), initiated an investigation of
the pipeline system of Kinder Morgan Liquid Terminals, LLC (Respondent or KMLT) Wood
River Terminal in Hartford, Illinois. The Wood River Terminal is owned by KM Phoenix Holdings
LLC and operated by KMLT, since acquisition of the terminal in 2016. PHMSA initiated its
investigation in response to a December 23, 2022, release of 11,694 barrels of gasoline at the Wood
River Terminal, all of which was fully contained within the Terminal’s secondary containment. The
release occurred after the failure of a girth weld on an above-grade short suction 12-inch pipeline
segment at the Wood River Terminal, in an area of the Terminal that was originally constructed in
the 1950s. In response to the release, KMLT tagged and locked out a portion of the short suction
segment in proximity to the failure. Pending further evaluation, the entire short suction pipeline
(defined in Section II.) has now been taken out of service, with the line tagged, locked out, and
drained.
As a result of the investigation, the Director, Eastern Region, OPS (Director), issued to
Respondent, by letter dated February 23, 2023, a Notice of Proposed Safety Order (Notice). The
Notice alleged that conditions exist on Respondent’s pipeline system that pose a pipeline
integrity risk to public safety, property, or the environment. The Notice also proposed that
KMLT take certain corrective measures to remedy the alleged conditions and ensure that the
public, property, and the environment are protected from the alleged integrity risk.
On March 22, 2023, KMLT responded to the Notice by timely submitting a request for an
informal consultation under 49 C.F.R. § 190.239(b)(2). Multiple informal consultation meetings
were held beginning on April 13, 2023.
As a result of the informal consultation, PHMSA and Respondent (the Parties) agree that
settlement of this proceeding by entry into this Consent Agreement (Agreement) is the most
appropriate means of resolving the issues raised in the Notice, will avoid further administrative



proceedings or litigation, and is in the public interest. Therefore, pursuant to 49 C.F.R. §
190.239(b)(2), without adjudication of any issue of law or fact, and upon consent and agreement,
the Parties agree to the following terms and conditions.
I. General Provisions
1. Respondent acknowledges that as the operator of the pipeline facilities subject to
the Notice, Respondent and its referenced pipeline facilities are subject to the jurisdiction of the
Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and administrative
orders issued thereunder. For purposes of this Agreement, Respondent acknowledges that it
received proper notice of PHMSA’s action in this proceeding and that the Notice states claims
upon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq., and the regulations and
orders issued thereunder.
2. Respondent agrees, for purposes of this Agreement, to address the integrity risks
identified in the Notice by completing the actions specified in Section II of this Agreement
(Corrective Measures) and to abide by the terms of this Agreement.
3. After Respondent returns this signed Agreement to PHMSA, the Agency’s
representative will present it to the Associate Administrator for Pipeline Safety, recommending
that the Associate Administrator adopt the terms of this Agreement by issuing an administrative
order (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement
constitute an offer of settlement until accepted by the Associate Administrator. Once accepted,
the Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.
4. Respondent consents to the issuance of the Consent Order, and hereby waives any
further procedural requirements with respect to its issuance. Respondent waives all rights to
contest the adequacy of notice, or the validity of the Consent Order or this Agreement, including
all rights to administrative or judicial hearings or appeals, except as set forth herein.
5. This Agreement shall apply to and be binding upon PHMSA and Respondent, its
officers, directors, and employees, and its successors, assigns, or other entities or persons
otherwise bound by law. Respondent agrees to provide a copy of this Agreement and any
incorporated work plans and schedules to all of Respondent’s officers, employees, and agents
whose duties might reasonably include compliance with this Agreement.
6. For all transfers of ownership or operating responsibility of Respondent’s pipeline
system referenced herein, Respondent will provide a copy of this Agreement to the prospective
transferee at least 30 days prior to such transfer. Respondent will provide written notice of the
transfer to the Director no later than 60 days after the transfer occurs.
7. This Agreement constitutes the final, complete and exclusive agreement and
understanding between the Parties with respect to the settlement embodied in this Agreement.
The Parties acknowledge that there are no representations, agreements or understandings relating
to settlement other than those expressly contained in this Agreement, except that the terms of this
Agreement may be construed by reference to the Notice.



8. Nothing in this Agreement affects or relieves Respondent of its responsibility to
comply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,
et seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters
PHMSA's right of access, entry, inspection, and information gathering or PHMSA's authority to
bring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the
regulations and orders issued thereunder, or any other provision of Federal or State law.
9. This Agreement does not waive or modify any Federal, State, or local laws or
regulations that are applicable to Respondent’s pipeline systems. This Agreement is not a
permit, or a modification of any permit, under any Federal, State, or local laws or regulations.
Respondent remains responsible for achieving and maintaining compliance with all applicable
Federal, State, and local laws, regulations and permits.
10. This Agreement does not create rights in, or grant any cause of action to, any third
party not party to this Agreement. The U.S. Department of Transportation is not liable for any
injuries or damages to persons or property arising from acts or omissions of Respondent or its
officers, employees, or agents carrying out the work required by this Agreement. Respondent
agrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,
and representatives from any and all causes of action arising from any acts or omissions of
Respondent or its contractors in carrying out any work required by this Agreement.
11. This Agreement does not constitute a finding of violation of any Federal law or regulation
and may not be used in any civil or administrative proceeding of any kind as evidence or proof of
any fact, fault, or liability, or as evidence of the violation of any law, rule, regulation, or
requirement, except in a proceeding to enforce the provisions of this Agreement. Respondent does
not admit or deny the alleged integrity risks identified in the Notice, but agrees, for purposes of this
Agreement, to address the alleged integrity risks identified in the Notice by completed the actions
specified in Section II. of this Agreement (Corrective Measures) and to abide by the terms of this
Agreement.
II. Corrective Measures:
12. Upon issuance of the Consent Order, Respondent agrees to perform the
Corrective Measures set forth below.
13. Definitions:
(A). “Director” means the Director, Eastern Region, OPS;
(B). “Effective Date” means the date on which the Consent Order is issued by the
Associate Administrator, PHMSA, incorporating the terms of this Agreement;
(C). “Affected Facility” means PHMSA jurisdictional pipeline assets at the Wood
River Terminal operated by KMLT;



(D). “Wood River Terminal MOP Determination Procedure” means the KMLT Site
Specific Procedure (SSP) previously approved by PHMSA; and
(E). “Short Suction Segment” means from the most southern flange within
containment of the empty tank bottom south of breakout tank 107, to the most northern
flange within containment of breakout tank 205.
14. Mechanical and Metallurgical Analysis. The Notice proposed KMLT must
conduct testing and failure analysis of the failed girth weld and submit the results to the Director
(proposed corrective measure No. 1 in the Notice). On April 28, 2023, KMLT provided the
Director a “Final Metallurgical Report and Chain of Custody” document addressing the failed girth
weld. The Parties agree proposed corrective measure No. 1 in the Notice has been completed.
15. Testing and MOP Validation of Short Suction Segment. Within 30 days of the
Effective Date, KMLT must complete the planned non-destructive examination (NDE) phased
array testing and stress analysis on the 12-inch diameter Short Suction Segment on which the
December 23, 2022, failure occurred. Prior to resuming service on the Short Suction Segment,
KMLT shall:
(A) and pipe grade;
Perform ultrasonic testing and other appropriate NDE to determine wall thickness
(B) Determine the internal design pressure of the segment under 49 C.F.R. § 195.106;
and,
(C) Validate the maximum operating pressure (MOP) and the percent of specified
minimum yield strength (SMYS) at which this segment operates pursuant to KMLT’s Wood River
Terminal MOP Determination Procedure.
KMLT must seek the Director’s prior approval for its plan to determine the internal design pressure
and to validate the MOP and percent of SMYS for this segment. Within 60 days of the Director’s
approval, KMLT must submit to the Director the results of such testing and analysis, and include
the results of its review of historical information obtained from the prior operator if relevant
records are located. The additional analysis in (A), (B), and (C) is not required if KMLT elects to
permanently remove the Short Suction Segment from service through abandonment under Part
195.
16. Pipeline Inventory and MOP Validation. Within 90 days of the Effective Date,
KMLT must submit to the Director a detailed inventory of the records for each pipeline1 within
the entire Affected Facility (except as provided in paragraph 15). The inventory must include for
each pipeline: pipeline diameter, wall thickness, coating and seam type, percent SMYS, and a
validated MOP. If KMLT is unable produce certain information via traceable, verifiable, and
complete records, KMLT must submit to the Director for approval a plan for identifying and
1 PHMSA jurisdictional pipeline segments and their components.



verifying the properties listed above in this paragraph, to include the determination of internal
design pressures and validation of MOP and percent of SMYS pursuant to KMLT’s Wood River
Terminal MOP Determination Procedure. The plan must address how KMLT will acquire or
create records verifying the missing information, including through the use of conservative
assumptions and/or additional field testing or other methods and the timeline for completion of
such. The records verifying the missing information must be provided no later than 120 days after
the Effective Date, unless modified pursuant to paragraph 23. Where available in historical
records, KMLT will provide pipeline year of construction, grade of pipe, and pipeline
manufacturer.
17. Remedial Work Plan. Within 30 days of submitting the detailed inventory of the
records in paragraph 16, KMLT must submit to the Director for approval a written remedial work
plan (Work Plan) that includes any necessary corrective measures. The Work Plan must include
provisions that address:
(A) The performance of potential additional field and/or metallurgical testing,
inspections, and/or evaluations – if warranted – to determine whether and to what extent the
conditions described in the Notice are present elsewhere in the Affected Facility;
(B) The performance of repairs or other corrective measures that fully remediate the
identified risk condition(s) on the Affected Facility piping. Include provisions for continuing long-
term periodic testing and integrity verification measures to ensure the ongoing safe operation of
the pipeline considering the results of the analyses, inspections, and corrective measures
undertaken pursuant to the Agreement; and,
(C) (B) of this paragraph 17.
A proposed schedule for completion of the actions required by paragraphs (A) and
18. KMLT must revise the Work Plan to incorporate new information obtained during
the evaluations and associated remedial activities. Any such plan revisions must be submitted to
the Director for prior approval.
19. become incorporated into this Agreement.
The Director may approve Work Plan elements incrementally. The Work Plan shall
20. Implement the Work Plan as it is approved by the Director, including any revisions
to the Work Plan that may become necessary.
21. Quarterly Reports. Submit quarterly reports to the Director that: (1) include
available data and results of the testing and evaluations; and (2) describe the progress of the repairs
and other remedial actions being undertaken.
22. Documentation of Costs. It is requested (not mandated) that KMLT maintain
documentation of the safety improvement costs associated with fulfilling this Agreement and
submit the total to the Director. It is requested that these costs be reported in two categories: (1)
total cost associated with preparation/revision of plans, procedures, studies, and analyses, and (2)



total cost associated with replacements, additions, and other changes to pipeline infrastructure.
23. Extensions of Time. The Director may grant an extension of time for compliance
with any of the terms of the Agreement upon a written request timely submitted demonstrating
good cause for the extension. The Director shall respond in writing to any such request.
III. Review and Approval Process:
24. With respect to any submission under Section II (Corrective Measures) of this
Agreement that requires the approval of the Director, the Director may: (a) approve, in whole or
in part, the submission; (b) approve the submission on specified, reasonable conditions; (c)
disapprove, in whole or in part, the submission; or (d) any combination of the foregoing. If the
Director approves, approves in part, or approves with conditions, Respondent will take all
actions as approved by the Director, subject to Respondent’s right to invoke the dispute
resolution procedures with respect to any conditions the Director identifies. If the Director
disapproves all or any portion of the submission, the Director will provide Respondent a written
notice of the deficiencies. Respondent will correct all deficiencies within the time specified by
the Director and resubmit it for approval.
IV. Dispute Resolution:
25. The Director and Respondent will informally attempt to resolve any disputes
arising under this Agreement, including any decision of the Director under the terms of Section
II (Corrective Measures). If Respondent and the Director are unable to informally resolve the
dispute within 15 calendar days after the dispute is first raised, in writing, to the Director,
Respondent may submit a written request for a determination resolving the dispute from the
Associate Administrator for Pipeline Safety, PHMSA. Such request must be made in writing and
provided to the Director, counsel for Eastern Region, and to the Associate Administrator for
Pipeline Safety, no later than 10 calendar days from the 15-day deadline for informal resolution
referenced in this paragraph. Along with its request, Respondent must provide the Associate
Administrator with all information Respondent believes is relevant to the dispute. Decisions of
the Associate Administrator under this paragraph will constitute final agency action. The
existence of a dispute and PHMSA’s consideration of matters placed in dispute will not excuse,
toll, or suspend any term or timeframe for completion of any work to be performed under this
Agreement during the pendency of the dispute resolution process except as agreed by the
Director or the Associate Administrator in writing.
V. Enforcement:
26. This Agreement is subject to all enforcement authorities available to PHMSA
under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190, including administrative civ
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