PANHANDLE EASTERN PIPELINE CO — Warning Letter

party submissionOfficial PDF12025003WL_Operator Response to Notice_07012025_(24-296382).pdf#

12025003WL_Warning Letter_05282025_(24-296382)_text.pdf, page 1Official PDFWARNING LETTER VIA ELECTRONIC MAIL: gregory.mcilwain@energytransfer.com May 28, 2025 Mr. Gregory McIlwain President & Chief Executive Officer Panhandle Eastern Pipeline Company, LP 1300 Main Street Houston, Texas 77002 CPF 1-2025-003-WL Dear Mr. McIlwain: From April 23 to April 25, 2024 a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) conducted an onsite inspection of Panhandle Eastern Pipeline Company, LP’s (PEPC) Howell Underground Natural Gas Storage in Livingston, Michigan. As a result of the inspection, it is alleged that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The item inspected and the probable violation is: 1. § 192.12 Underground natural gas storage facilities. (a) … (b) Depleted hydrocarbon and aquifer reservoir UNGSFs. (1) … (2) Each UNGSF that uses a depleted hydrocarbon reservoir or an aquifer reservoir for natural gas storage and was constructed on or before July 18, 2017, must meet the provisions of API RP 1171 (incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and paragraph (c) of this section, by January 18, 2018, and must meet all provisions of paragraph (d) of this section by March 13, 2021.#

12025003WL_Warning Letter_05282025_(24-296382)_text.pdf, page 2PEPC failed to meet the provisions of American Petroleum Institute Recommended Practice 1171 (API RP 1171), Section 9. Specifically, PEPC failed to perform annual master valve function and isolation tests of Well Holcomb 1-27 in accordance with API RP 1171, Section 9.3.2 (Section 9.3.2). Section 9.3.2 states in part, “[t]he operator shall test the operation of the master valve and wellhead pipeline isolation valve at least annually for proper function and ability to isolate the well.” During the inspection, PHMSA reviewed PEPC’s records of wellhead valve operation testing. PEPC stated they did not perform master valve function and isolation testing of Well Holcomb 1- 27 due to the subsurface safety valve tubing coming through the master valve. The well is scheduled to have workover in 2025 to remove the tubing. Therefore, PEPC failed to test the operation of the master valve and wellhead pipeline isolation valve at least annually as required by Section 9.3.2 pursuant to § 192.12(b)(2). Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $272,926 per violation per day the violation persists, up to a maximum of $2,729,245 for a related series of violations. For violation occurring on or after December 28, 2023 and before December 30, 2024, the maximum penalty may not exceed $266,015 per violation per day the violation persists, up to a maximum of $2,660,135 for a related series of violations. For violation occurring on or after January 6, 2023 and before December 28, 2023, the maximum penalty may not exceed $257,664 per violation per day the violation persists, up to a maximum of $2,576,627 for a related series of violations. For violation occurring on or after March 21, 2022 and before January 6, 2023, the maximum penalty may not exceed $239,142 per violation per day the violation persists, up to a maximum of $2,391,142 for a related series of violations. For violation occurring on or after May 3, 2021 and before March 21, 2022, the maximum penalty may not exceed $225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a related series of violations. For violation occurring on or after January 11, 2021 and before May 3, 2021, the maximum penalty may not exceed $222,504 per violation per day the violation persists, up to a maximum of $2,225,034 for a related series of violations. For violation occurring on or after July 31, 2019 and before January 11, 2021, the maximum penalty may not exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the item identified in this letter. Failure to do so will result in Panhandle Eastern Pipeline Company, LP being subject to additional enforcement action.#

12025003WL_Warning Letter_05282025_(24-296382)_text.pdf, page 3No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 1-2025-003-WL. 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). Sincerely, Robert Burrough Director, Eastern Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration#