SOUTH WILMINGTON-PIPELINE — Notice of Amendment

party submissionOfficial PDF220076007M_Operator Response_06252007.pdf#

220076007m_notice letter_04182007_text.pdf, page 1Official PDFu 5 Department of Transportation Pipeline and Hazardous Materials Safety Administration 233 Peachtree Street Ste 600 Atlanta, GA 30303 NOTICE OF AMENDMENT CERTIFIED MAIL — RETURN RECEIPT RE UESTED Apnl 18, 2007 Mr Dan McCunn General Manager, East Terminals Vopak Terminals, South Wdmington Pipeline Canada Inc 5378 est, rue Notre Dame Montreal, Que H1M 2C4 CPF 2-2007-6007M Dear Mr McCunn On November 28 - 30, 2005, a representative of the Pipeline and Hazardous Matenals Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected South Wilmington (SW) Pipeline procedures for Operations and Maintenance in Wilmington, North Carolina PHMSA completed the initial draft report for tins inspection in December 2005 As a result, on December 29, 2005, PHMSA sent South Wdmington (SW) a "request for information" (RFI) letter to address procedure issues On March 14, 2006 PHMSA received response matenals from South Wilmington which included revised (1/31(2006 revision 3) sections of South Wilmington's procedures PHMSA has completed its review of these materials On the basis of this review, PHMSA has identified the apparent inadequacies found witlun South Wilmington's procedures, as descnbed below 11195. 56 Fding safety-related condition reports. (b) The report must be headed "Safety-Related Condition Report" and provide the following information (5) Date condiaon was discovered and date condition was first determined to exist. (6) Location of condition, with reference to the State (and town, city, or county) or number, mdepost, landmark, or name of pipelme.#

220076007m_notice letter_04182007_text.pdf, page 2(7) Description of the condition, mcluding circumstances leading to its discovery, any significant effects of the condition on safety, and the name of the commodity transported or stored. (8) The corrective action taken (includmg reduction of pressure or shutdown) before the report is submitted and the planned follow-up or future corrective action, including the anticipated schedule for starting and concludmg such action. In section 6 3 2B of SW's O&M manual, sections addressing 195 56(b) (5-8) were missing I'l195. 214 Welding procedures (a) Welding must be performed by a qualified welder in accordance with weldmg procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code (incorporated by reference, see (l 195. 3). The quality of the test welds used to quahfy the welding procedure shall be determined by destructive testing. (b) Each weldmg procedure must be recorded m detad, including the results of the qualifying tests. This record must be retained and followed whenever the procedure is used Weldiug procedures requiring quahfication in accordance with API or ASME along with specific sections and edktious are missing Welding procedures must be "recorded" iu detail "including results of qualifying tests" The SW procedures only specifies that destructive tests (not quahfying) should be available whenever procedure is in use $195. 222 Welders: Quahfication of welders. (a) Each welder must be quahfied in accordance with section 6 of API 1104 (incorporated by reference, see $195. 3) or sechon IX of the ASME Boder and Pressure Vessel Code, (incorporated by reference, see $195. 3) except that a welder quahfied under an earher edition than listed in I'l195 3 may weld but may not re- quahfy under that earher edition. (b) No welder may weld with a welding process unless, within the preceding 6 calendar months, the welder has— (1) Engaged in weldmg with that process; and (2) Had one welded tested and found acceptable under section 9 of API 1104 (incorporated by reference, see ('l195. 3). The SW's procedures do not adequately address this regulation 4 ('l195. 226 Weldmg: Arc burns. (a) Each arc burn must be repaired. (b) An arc burn may be repaired by completely removmg the notch by gnnding, if the grmding does not reduce the remaining wall thickness to less than the#

220076007m_notice letter_04182007_text.pdf, page 3minimum thickness required by the tolerances in the specification to which the pipe is manufactured. If a notch is not repairable by gnnding, a cyhnder of the pipe containing the enure notch must be removed. (c) A ground may not be welded to the pipe or fitting that is bemg welded. SW*s procedures do not address regulation sections (a) and (c) In addition, the procedures do not address venfication of removal of arc burns by NDT and removal of pipe section when the notch is not repairable by gnnding $195. 228 Welds and welding inspection: Standards of acceptabihty. (a) Each weld and weldmg must be inspected to insure comphance with the requirements of this subpart. Visual inspection must be supplemented by nondestructive testing. (b) The acceptabdity of a weld is determined according to the standards in Section 9 of API 1104. However, if a girth weld is unacceptable under those standards for a reason other than a crack, and if Appendix A to API 1104 (mcorporated by reference, see t'I 195. 3) applies to the weld, the acceptabdity of the weld may be determined under that appendLx. SW's procedures do not adequately address ttus regulation tt195. 234 Welds: Nondestructive testing. (b) Any nondestructive testing of welds must be performed— (I) In accordance with a written set of procedures for nondestructive testing; and (2) With personnel that have been trained in the established procedures and in the use of the equipment employed in the testing. SW's procedures do not adequately address tlus regulation sections (b) (I) and (b) (2) tl195. 230 Welds: Repair or removal of defects. (a) Each weld that is unacceptable under tt195. 228 must be removed or repaired. Except for welds on an offshore pipehne bemg installed from a pipe lay vessel, a weld must be removed if it has a crack that is more than 8 percent of the weld length (b) Each weld that is repaired must have the defect removed down to sound metal and the segment to be repaired must be preheated if conditions exist which would adversely affect the quahty of the weld repair. After repair, the segment of the weld that was repaired must be inspected to ensure its acceptabdity. (c) Repair of a crack, or of any defect in a previously repaired area must be in accordance with written weld repair procedures that have been quahfied under tt195. 214. Repair procedures must provide that the minimum mechanical properties specified for the welding procedure used to make the original weld are met upon completion of the final weld repair SW's procedures do not adequately address this regulation#

220076007m_notice letter_04182007_text.pdf, page 4(1195. 302 General requirements. (a) Except as otherwise provided in this section and in t'1195. 305(b), no operator may operate a pipehne unless it has been pressure tested under this subpart without leakage In addition, no operator may return to service a segment of pipehne that has been replaced, relocated, or otherwise changed untd it has been pressure tested under this subpart without leakage SW's procedures do not adequately address tlus regulation t'1195. 305 Testing of components. (a) Each pressure test under ('1195. 302 must test all pipe and attached fittings, includmg components, unless otherwise permitted by paragraph (b) of this section. Operator makes general statement "under Testing of Components" section indicating all pipe and attached fittings, mcludiug components are required to be tested SW procedures do not require testing in accordance with 49CFR part 195 302 10. (1195. 402 Procedural manual for operations, maintenance, and emergencies (c) Mamtenance otid normal operations. The manual required by paragraph (a) of this section must mclude procedures for the following to provide safety during maintenance and normal operations: (7) Starting up and shutting down any part of the pipehne system in a manner designed to assure operation within the hmits prescribed by paragraph $195. 406, consider the hazardous hquid or carbon dioxide in transportation, variations in altitude along the pipelme, and pressure monitoring and control devices. (10) Abandonmg pipehne facdities, mcluding safe disconnection from an operatmg pipeline system, purging of combustibles, and seahng abandoned facfliues left in place to minimize safety and environmental hazards. For each abandoned offshore pipeline facility or each abandoned onshore pipehne facflity that crosses over, under or through commercially navigable waterways the last operator of that facihty must file a report upon abandonment of that facdity in accordance with $195. 59 of this part. (11) Minimizing the likehhood of accidental ignition of vapors in areas near facdities identifled under paragraph (c)(4) of this section where the potential exists for the presence of flammable hquids or gases. SW did uot provide detailed startup shutdown procedures SW procedures dot not adequately address regulation section (c) (10) or minimization of accidental ignition for immediate response areas 11. $195. 420 Valve maintenance. (a) Each operator shall maintain each valve that is necessary for the safe operation of its pipehne systems in good worlung order at all times. SW's procedures do not adequately address this regulation#

220076007m_notice letter_04182007_text.pdf, page 512. g 195. 555 What are the quahfications for supervisors" You must require and verify that supervisors maintain a thorough knowledge of that portion of the corrosion control procedures estabhshed under t'l195. 402(c)(3) for which they are responsible for msurmg comphance. SW's procedures do uot adequately address this regulation 13. (l 195. 559 What coating material may I use for external corrosion control? Coating material for external corrosion control under tl195. 557 must- (a) Be designed to mitigate corrosion of the buried or submerged pipehne, (b) Have sufficient adhesion to the metal surface to prevent under film migrahon of moisture; (c) Be sufficiently ductde to resist cracking; (d) Have enough strength to resist damage due to handling and soil stress; (e) Support any supplemental cathodic protection; and (I) If the coating is an msulating type, have low moisture absorption and provide high electrical resistance. SW's procedures do uot adequately address this regulation SW did provide procedures on type of coating to be used on new pipe, dependent on temperature conditions 14. t'l195, 561 When must I inspect pipe coating used for external corrosion controlo (a) You must mspect all external pipe coating required by tt195. 557 lust prior to lowenng the pipe mto the ditch or submergmg the pipe (b) You must repair any coating damage discovered. SW's procedures do not adequately address this regulation 15. $195. 567 Which pipehnes must have test leads and what must I do to mstall and maintain the leads? (b) Installation. You must install test leads as follows: (1) Locate the leads at intervals frequent enough to obtain electrical measurements indicating the adequacy of cathodic protection. (2) Provide enough looping or slack so backfillmg will not unduly stress or break the lead and the lead wdl otherwise remam mechanically secure and electrically conductive. (3) Prevent lead attachments from causmg stress concentrations on pipe. (4) For leads mstalled in conduits, suitably msulate the lead from the conduit. (5) At the connection to the pipehne, coat each bared test lead wire and bared metalhc area with an electrical insulating material compatible with the pipe coating and the msulation on the wire. (c) Mamtenance. You must maintain the test lead wires in a condihon that enables you to obtain electrical measurements to determine whether cathodic protection complies with g 195 571.#

220076007m_notice letter_04182007_text.pdf, page 6Although SW procedures indicate a contractor will install test leads, SW is ultimately responsible for the adequacy and effectiveness of the test leads SW procedures should identify how it wdl estabhsh effective test lead spacing and how it will maintain the test leads 16. $195. 571 What criteria must I use to determine the adequacy of cathodic protection" Cathodic protection required by this subpart must comply with one or more of the apphcable criteria and other considerations for cathodic protechon contained in paragraphs 6. 2 and 6 3 of NACE Standard RP 0169 (mcorporated by reference, see t'l 195. 3). SW's procedures do not adequately address with this regulation ln addition, SW's procedures specified that cathodic protection for the company's buried pump station piping wall be in accordance with Exxon Mobil global practices 17. t'l195. 573 What must I do to monitor external corrosion controls (a) Protected papelines. You must do the following to determine whether cathodic protection required by this subpart comphes with $195. 571: (2) Identify not more than 2 years after cathodic protection is installed, the circumstances in which a close-interval survey or comparable technology is practicable and necessary to accomplish the oblectives of paragraph 10. 1. 1. 3 of NACE Standard RP 0169 (incorporated by reference, see g 195. 3). (e) Corrective action. You must correct any identified deficiency in corrosaon control as required by t'l195. 401(b). However, if the deficiency involves a pipehne in an mtegnty management program under g 195 452, you must correct the deficiency as required by tl195. 452(h). SW's procedures do not adequately address regulation section (a) (2) and (e) 18. (l195. 575 Which facdities must I electrically isolate and what inspections, tests, and safeguards are requiredo (a) You must electrically isolate each buried or submerged pipeline from other metalhc structures, unless you electrically interconnect and cathodically protect the pipehne and the other structures as a single unit. (d) If you install an msulating device in an area where a combustible atmosphere is reasonable to foresee, you must take precautions to prevent arcing. (e) If a pipeline is m close proximity to electrical transmission tower footings, ground cables, or counterpoise, or in other areas where it is reasonable to foresee fault currents or an unusual risk of lightning, you must protect the pipeline against damage from fault currents or hghtning and take protective measures at insulatmg devices. SW's procedures do not adequately address regulation section (a) (d) and (e)#

220076007m_notice letter_04182007_text.pdf, page 719. $195 581 Which pipehnes must I protect against atmospheric corrosion and what coatmg material may I use? (b) Coating material must be suitable for the prevention of atmospheric corrosion SW's procedures do not adequately address this regulation Res onse to tlus Notice This Notice is provided pursuant to 49 U S C tt 60108(a) and 49 C F R I't 190 237 Enclosed as part of this Notice is a document entitled Response Options for Pipehne Operators m Coinphance Proceedmgs Please refer to this document and note the response options Be advised that all material you submit in response to this enforcement action is subiect to being made pubhcly available If you believe that any portion of your responsive matenal quahfies 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 beheve quahfy for confidential treatment redacted and an explanation of why you believe the redacted information quahfies for confidential treatment under 5 U S C 552(b) If you do not respond within 30 days of receipt of tlus Notice, this constitutes a waiver of your nght to contest the allegations in this Notice and authorizes the Associate Administrator for Pipehne Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order If, after opportunity for a heanng, your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C F R I'1 190 237) If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 45 days of receipt of tlus Notice This penod may be extended by wntten request for good cause Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action wdl be closed In correspondence concerning this matter, please refer to CPF 2-2007-6007M and, for each document you submit, please provide a copy in electromc format whenever possible Linda Daugherty Director, Southern Region Pipeline and Hazardous Materials Safety Administration Enclosure Response Options for Pipehne Operators m Comphance Proceedmgs#