CYPRESS INTERSTATE PIPELINE LLC — Notice of Amendment

party submissionOfficial PDF320075008M_operator_response_to_NOA_and_request_for_time_extension_04122007.pdf#

320075008M_Notice of Amendment_03072007.pdf, page 1Official PDF@ U.S. Deportment of Tronsporlotion Pipellne ond Hqzordous moterialt sqfety Admlnlsrotion 901 Locust Streel, Suite t+62 Kansas City, MO 64106-2641 NOTICE OI'AMENDMENT CERTIF'IED MAIL - RETURN RECEIPT REOUESTED March7,2007 Mr. Ron McClain Vice President Operations Kinder Morgan Energy Partners, L.P. 500 Dallas Street, Suite 1000 Houston. TX77002 cPF',3-2007-5008M Dear Mr. McClain: on April 4-8, April 11-15, April 25-29, andMay 9-13, 2005, a representative of the pipeline and Hazardous Materials Safety Adminishation (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected Kinder Morgan Energy Parhrers, L.P. procedures for operation and maintenance in field locations in Itlinois, Iowa, Kansas, Missouri, Indiana, and Nebraska. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within Kinder Morgan Energy Partners, L.P.'s plans or procedures, as described below: 1. $195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. $195.a02(c) indicates that the manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. Review of the operation and Maintenance (o&M) manual found that the following requirements were not adequately covered in the manual or needed to be expanded to#

320075008M_Notice of Amendment_03072007.pdf, page 2provide additional guidance to your personnel. Items (a) through (d) are required to be included in the manual by g195.a02(c)(3). (a) (b) (c) s195.432 Breakout tanks. (b) Each operator shall inspect fhe physical integrity of in-service atmospheric and low-pressure steel abovegiound breakout tanks according to section 4 of ApI standard 653. However, if structural conditions prevent access to the tank bottom, the bottom integrity may he assessed according to a plan included in the operations and maintenance manual under 9195.402(c)(3). Kinder Morgan's procedures do not provide for the requirement to inspect low- pressure steel aboveground breakout tanks according to section 4 ofApl standard 653 in its operations and Maintenance Manual. These procedures do not provide a description of how each element required by ApI 653 is to be accomplished or provide for fulI documentation of the inspections. s195.432 Breakout tanks. (c) Each operator shall inspect the physical integrity of in-service steel aboveground breakout tanks buitt to Apr Standard 2510 according to section 6 ofApI 510. Kinder Morgan's procedures do not provide for the requirement to inspect high- pressure ASME pressure vessels which are steel aboveground breakout tanks according to section 6 of API 510 in its operations and Maintenance Manual. These procedures do not provide a description ofhow each element required by API 510 is to be accomplished or provide for fi.rll documentation of the inspections. $195.214 welding Procedures (a) welding must be performed by a qualified welder in accordance with welding procedures qualified under Section s of API 1104 or Section rX of the ASME Boiler and pressure vessel code. The quality of the test welds used to qualify the welding procedure shall be determined by destructive testing. Kinder Morgan has not qualifred welding procedure ES-g405 for use on Grade A through X-65 materials in accordance with section 5 of ApI I104. weldine Procedure ES-8405 states it is applicable lor all materials from Grade A through X70. Kinder Morgan lacks welding procedure qualifrcation tests of Welding Procedure ES-8405 for specified minimum yield strength less than or equal to 42,000 psi, for specified minimum yield strength greater than 42,000 psi but less than 65,000 psi, and for the specified minimum yield strength equal to 65,000 psi (See API 1104 Section 5.4.2.2). Kinder Morgan's coupon Test Reports (l l-5p- 70+,5117195 and l3-5P-70+,8/24/93) only qualify Welding procedure ES-g405 for use on X70 materials; additional qualifications tests are required for materials other than the X70 listed in this procedure.#

320075008M_Notice of Amendment_03072007.pdf, page 3(d) $195.234 Nondestructive testing. (b) Any nondestructive testing of welds must be performed: (1) In accordance with a written set of procedures for nondestructive . testing; Kinder Morgan's NDT procedures did not include written procedures for ultrasonic or magnetic particle testing of welds. Response to this Notice This Notice is provided pursuant to 49 U.S.C. g 60108(a) and 49 C.F.R. $ 190.237. Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. 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 ofwhy you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without fuither notice to you and to issue a Final Order. If, after opporhmity for a hearing, 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. $ 190.237). If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 30 days of receipt of this Notice. This period may be extended by written request for good cause. Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed. In correspondence concerning this matter, please refer to CPX'3-2007-5008M and, for each document you submit, please provide a copy in elechonic format whenever possible. Sincerelv. ft -,/j ,t/s#ryfr#ee- /ffivan A. Huntoon fl' Director, Central Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operatrtrs in Compliance Proceedings#

320075008M_Notice of Amendment_03072007.pdf, page 4. Response Options for Pipeline Operators in Compliance Proceedings The requirements of +fC.p.R. Paxt 190, Subpart B ($$ 190.201 -190.237) govem response to Notices issued by a Regional Director, Pipeline and Hazardous Materials Safe/y Administration (PHMSA). I. Brocedures for Rerpondine to a NOTICE OF PROBABLE VIOLATION: Within 30 days of receip of a Notice of Probable Violation, the respondent shall respond to the Regional Director who issued the Notice in the following way: a. When the Notice contains a proposed CIVIL PENALTY* - l. Pay the proposed civil penalty and advise the Regional Director of the pa)'rnent. This authorizes PHMSA to make findings and to close the case with prejudice to the respondent. Payment terms are outlined below; 2. Submit written explanations, information, or other materials in response to the allegations and/or seek eliminati<in or mitigation of the proposed civil penalty. Refer to 49 C.F.R. $ 190.225 for assessment considerations, which include the respondent's ability to pay and the effect on the respondent's ability to stay in business, upon which civil penalties are based; or 3. Request a hearing as described below to contest the allegations and/or proposed assessment ofa civil p€nalty. b. WhentheNotice contains apropossd COMPLfANCE ORDER* - l. NotiS the Regional Director that you intend to take the steps in the proposed compliance order; 2. Submit witten explanations, infonnation, or other materials in answer to the allegations in the Notice and object to or seek clarification of the proposed compliance order items in whole or in part; or a Request a hearing as described below to contest the allegations and/or proposed compliance order items; When the Notice contains a WARNING ITEM - No written response is required. The respondent is warned that if it does not take appropriate action to correct these items, enforcement action will be taken ifa subsequent inspection reveals a violation. 1of5#

320075008M_Notice of Amendment_03072007.pdf, page 5II. IV. * Failure of the respondent to respond to the Notice within 30 days of receipt constitutes a waiver of the right to contest the allegations in the Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order. ,, Procedures for Respondine to a NOTICE OF AMENDMENT*-- Within 30 days of receip of a Notice of Amendment, the respondent shall respond to the Regional Director who issued the Notice in the following way: a. Notiff the Regional Director of your plans to address the inadequacies identified in the Notice: b. Submit written explanations, information, or other materials in answer to the allegations in the Notice and/or object to or seek clarification of the proposed amendment items in whole or in parfi or Request a hearing as described below to contest the allegations in the Notice. * Failwe of the respondent to respond to the Notice within 30 days of receipt constitutes a waiver of the right to contest the allegations in the Notice and authorizes the Associate Adminishator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order. Procedure for Requesting a Hearing A request for a hearing must be in writing and accompanied by a statement of the issues which the respondent intends to raise at the hearing. The issues may relate to the allegations, new information, or to the proposed compliance order or proposed civil penalty amount. Refer to 49 C.F.R. $ 190.225 for assessrhent considerations upon which civil penalties are based. A respondent's failure to specifr an issue may result in waiver ofthe right to raise that issue at the hearing. The respondent's request must also indicate whether or not respondent will be represented by counsel at the hearing. Failure to request a hearing in writing within 30 days of receipt of a Notioe waives the right to a hearing. In addition, if the amount of the proposed civil penalty or the proposed corrective action is less than $10,000, the hearing will be held by telephone, unless the respondent submits a written request for an in-person hearing. Complete hearing procedures can be found at 49 C.F.R. $ 190.21 1 . Extensions of Time An extension of time to preparc an appropriate response to a Notice may be granted, at the agency's discretion, following submittal of a written request to the Regional Director. The request must indicate the amount of time needed and the reasons for the extension. The request must be submitted within 30 days of receipt of the Notice. 2of5#

320075008M_Notice of Amendment_03072007.pdf, page 6V. tr'reedom of Information Act Any material prepared by PHMSA, including the violation report the Notice, and any order issued in this case, and any material provided to PHMSA by the respondent, may be considered public information and subject to disclosure under the Freedom of Information Act (FOIA). If the information you provide is security serisitive, privileged, confidential or may cause your company competitive disadvantages, please clearly identify the material and provide justification why the documents, or portions of a document should not be released under FOIA. If we re ceive a request for your material, we will notifr you if PHMSA, after reviewing the materials and your provided justification, determines that wittrholding the materials does not meet any exemption provided under the FOIA, You may appeal the agency's decision to release material under the FOIA at that time. Your appeal will stay the release of those materials until a final decision is made. Small Business Regulatorv Enforcement X'airness Act Information The Small Business and Agricirltural Regulatory Enforcement Ombudsman and l0 Regional Faimess Boards were established to receive comments from small businesses about federal agency enforcement actions. The Onibudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. Ifyou wish to comment on the enforcement a.ctions of the Pipeline and Hazardous Materials Safety Administrafion, call l-888-REG-FAIR (1-888-734-3247) or go to http ://www. sba. gov/ombudsman/dsp_faq. html. 3 of5#

320075008M_Notice of Amendment_03072007.pdf, page 7VII. PAYMENTINSTRUCTIONS : Civil Penulty Paymen$ of Less Than $10,000 Payment ofa civil penalty ofless than $10,000 proposed or assessedo under Subpart B ofPart 190 of the Pipeline Safety Regulations can be made by certified check, money order or wire transfer. Payment by certified check or money order (containing the CPF Number for this case) should be made payable to the "Department of rransportation" and should be sent to: Federal Aviation Administration Mike Monroney Aeronautical Center Financial Operations Division (AMZ-300) P.O. Box 25082 Oklahoma City, OK 7 3 125 -49 | 5 Wire hansfer payments of less than $ I 0,000 may be made through the Federal Reserve Communications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions conceming wire transfer should be directed to the Financial Operations Division at (405) 954-8893, or at the above address. Civil Penally Payments of $10,000 or more Payment ofa civil penalty of$10,000 or more proposed or assessed under Subpart B ofPart 190 of the Pipeline Safety Regulations must be made wire transfer (49 C,F.R g 89.21 (bX3), through the Federal Reserve Communications System @edwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions conceming wire transfers should be directed to the Financial Operations Division at (405) 954-8893, or at the above address. INSTRUCTIONS X'OR ELECTRONIC T'UND TRANSF'ERS (I) RECETVERABANO. 021030004 (2) TYPE/Sr.JB-TYPE (Provided by sending bank) (3) SENpTNGBANKABANO. (Provided by sending bank) (4) SENpTNG BANK REF NO. @rovided by sending bank) (5)AMOTJNT (6) SENDINGBANKNAME (Provided by sending bank) (7) RECEIVERNAME TREASNYC (8) PROpUCT COpE (Normally CTR, or as provided by sending bank) (9) BENEFICIAL GNF) = AGENCY LOCATION CODE BNF: /ALC-69-14-0001 (r 0) REASONS FOR PAYMENT Example: PHMSA - CPF # / Ticket Number/?ipeline Assessment number 4 of5#

320075008M_Notice of Amendment_03072007.pdf, page 8INSTRUCTIONS: You as sender of the wire transfer, must provide the sending bank with the information for blocks (l), (5), (7), (9), and (10). The information provided in Blocks (l), (7), and (9) are constant an&remain the same for all wire transfers to the Pipeline and Hazardous Materials Safety Administration, Departrnent of Transportation. /: Block #1 - RECEIVER ABA NO. - "021030004". Ensure the sending bank enters this 9-digit identification number; it represents the routing symbol for the U.S. Treasury at the Federal Reserve Bank inNew York. Block #5 - AMOUNT - You as the sender provide the amount of the transfer. Please be sure the transfer amount is pwrctuated with commas and a decimal point. EXAMPLE: $10.000.00 Block #7 - RECEIVER NAME - *TREAS NYC". Ensure the sending bank enters this abbreviation. It must be used for all wire transfers to the Treasury Departrnent. Block#9 - BENEFICIAL - AGENCY LOCATION CODE - "BNX':/ALC-69-14-0001". Ensure the sending bank enters this information. This is the Agency Location Code for the Pipeline and Hazardous Materials Safety Administration, Departrnent of Transportation. Block #10 - REASON FOR PAYMENT - "AC-payment ior PHMS A Case # | To ensure your wire transfer is oredited. properly, enter the oase number/tioket number or Pipeline Assessment number, and oountr5i." NOTE: A wire hansfer must comply with the format and instructions or the Department cannot accept the wire transfer. You as the lender can assist this process by notifying the Financial Operations Division (405) 954-8893 at the time you send the wire transfer. November 2006 for)#