MAGELLAN PIPELINE COMPANY, LP — Warning Letter

320145008W_Warning Letter_09262014_text.pdf, page 1Official PDFWARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED September 26, 2014 Mr. Michael Pearson VP of Technical Services Magellan Midstream Partners, LP One Williams Center, Mail Drop 27 Tulsa, Oklahoma 74172 CPF 3-2014-5008W Dear Mr. Pearson: On June 11-14, 2013, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your facilities in Sioux Falls, Iowa. As a result of the inspection, it appears that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation is: 1. §195.49 Annual report Each operator must annually complete and submit DOT Form PHMSA F 7000-1.1 for each type of hazardous liquid pipeline facility operated at the end of the previous year. An operator must submit the annual report by June 15 each year, except that for the 2010 reporting year the report must be submitted by August 15, 2011. A separate report is required for crude oil, HVL (including anhydrous ammonia), petroleum products, carbon dioxide pipelines, and fuel grade ethanol pipelines. For each state a pipeline traverses, an operator must separately complete those sections on the form requiring information to be reported for each state.#

320145008W_Warning Letter_09262014_text.pdf, page 2Magellan did not accurately complete all sections of DOT Form PHMSA F7000-1.1. It was discovered during the inspection that two tanks were not correctly designated as regulated breakout tanks. Tanks 526 in Sioux Falls, Iowa, and 429 in Alexandria, Minnesota, were determined to be regulated breakout tanks containing transmix product which were not previously counted for reporting on the form. Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 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 items identified in this letter. Failure to do so will result in Magellan Midstream Partners, LP being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 3-2014-5008W. 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, Linda Daugherty Director, Central Region Pipeline and Hazardous Materials Safety Administration 2#