PEMBINA COCHIN LLC — Notice of Probable Violation

party submissionOfficial PDF320205004_Operator Response to Notice and Request for Hearing_05222020.pdf#

320205004_PHC Hearing Scheduled_06232020_text.pdf, page 1Official PDFJune 23, 2020 VIA ELECTRONIC MAIL TO: GHopkins@velaw.com and Allan.Beshore@dot.gov Mr. George C. Hopkins Counsel for Pembina Cochin, LLC Vinson & Elkins, LLP 2200 Pennsylvania Ave. NW Suite 500 West Washington, DC 20037 Mr. Allan C. Beshore Director, Central Region Pipeline and Hazardous Materials Safety Administration 901 Locust Street, Suite 462 Kansas City, Missouri 64106 Re: Notice of Hearing, Pembina Cochin, LLC CPF No. 3-2020-5004 Dear Mr. Hopkins and Mr. Beshore: In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued to Pembina Cochin, LLC by the Office of Pipeline Safety in the above-referenced matter. The hearing will take place via videoconference on October 21, 2020, beginning at 9:00 a.m. Central Time. At least 10 calendar days prior to the hearing (or by October 11, 2020), both parties must submit and exchange any additional written materials they intend to present at the hearing and a list of attendees. This information should be provided electronically. Materials not submitted by this date may be excluded. If you have any questions, please do not hesitate to call me at (202) 366-6139 or Kristin.Baldwin@dot.gov. Sincerely, Kristin Baldwin Presiding Official cc: Ms. Melanie Stevens, Counsel, Central Region, Office of Pipeline Safety, PHMSA#

320205004_NOPV PCP PCO_03192020_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED March 19, 2020 Mr. Ron McClain Vice President – Engineering and Operations Kinder Morgan Cochin, LLC 500 Dallas Street, Suite 1000 Houston, Texas 77002 CPF 3-2020-5004 Dear Mr. McClain: From June 7, 2016 through October 21, 2016, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected your Kinder Morgan Cochin facilities in Kankakee, Illinois, and Rodgers, North Dakota. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violations are:#

320205004_NOPV PCP PCO_03192020_text.pdf, page 21. §195.307 Pressure testing aboveground breakout tanks. (c) For aboveground breakout tanks built to API Std 650 (incorporated by reference, see §195.3) and first placed in service after October 2, 2000, testing must be in accordance with sections 7.3.5 and 7.3.6 of API Standard 650 (incorporated by reference, see §195.3). Kinder Morgan Cochin first placed in-service Tank 4 after October 2, 2000, located at Kankakee, IL terminal and failed to pressure test Tank 4, in accordance with section 7.3.5 of API Standard 650. API Std 650 section 7.3.5, Testing of the Shell, states, “If water is available for testing the shell, the tank shall be filled with water as follows: (1) to the maximum design liquid level.” Kinder Morgan’s “Technical Standard for Hydrostatic Testing” record for Kankakee Tank 4 did not show the height of the water. Tank 4 has been in service since December 1, 2014 and was in-service at the time of the PHMSA field inspection from August 22 to August 26, 2016. Kinder Morgan Cochin could not produce evidence that the water level for Tank 4 was filled to the maximum design liquid level. 2. §195.505 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (b) Ensure through evaluation that individuals performing covered tasks are qualified; Kinder Morgan Cochin failed to follow its written operator qualification program to ensure through evaluation that individuals performing covered tasks are qualified. Kinder Morgan’s Operator Qualification program for Facilities Subject to DOT Parts 192 and 195 stated in Section 3.2, “KM employees and contractors performing covered tasks are OQ-qualified by evaluating their knowledge, skill and ability. On most tasks, this is accomplished by using a knowledge test and skill evaluation.” Kinder Morgan Cochin’s records showed that Kinder Morgan utilized contractors to perform the pig receiver modifications at the Rogers Pump Station on May 6, 2016. On May 7, 2016, a leak occurred at the Rogers Pump Station. Kinder Morgan’s internal investigation determined that the cause for the event was that the contractor did not thoroughly tighten the threaded fitting upon completion of the modification work. After reviewing records from the Project Book for the Roger’s Receiver, PHMSA requested the operator’s qualification records for the contractors who performed the modification, to establish that they were qualified to perform the covered task. Kinder Morgan Cochin did not produce any records to demonstrate that the contractor 2#

320205004_NOPV PCP PCO_03192020_text.pdf, page 3employee or contractor supervisor were qualified to perform the required Kinder Morgan Cochin covered task “104.14, General Pipeline Repair – Component Replacement.” After reviewing the incident investigation summary and further email correspondence between PHMSA and Kinder Morgan Cochin, Kinder Morgan Cochin confirmed the contractor’s employee was not qualified. The contractor’s employee did not have the required third-party training elements to be operator qualified under Kinder Morgan Cochin’s operator qualification program. The contractor employee was also not under the direct supervision (span of control) of a qualified individual. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved for the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $187,200 as follows: Item number PENALTY 1 2 $28,800 $158,400 Proposed Compliance Order With respect to item 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Kinder Morgan Cochin, LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice 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. All material you submit in response to this enforcement action may be 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 3#

320205004_NOPV PCP PCO_03192020_text.pdf, page 4a 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). Following the receipt of this Notice, you have 30 days to submit written comments, or request a hearing under 49 CFR § 190.211. 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 further notice to you and to issue a Final Order. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. This period may be extended by written request for good cause. In your correspondence on this matter, please refer to CPF 3-2020-5004 and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings Cc: Mr. Darren Marine Senior Executive Pembina Cochin, LLC 4000, 585-8 AVE SW Calgary, Alberta T2P1G1 Canada dmarine@pembina.com 4#

320205004_NOPV PCP PCO_03192020_text.pdf, page 5PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Kinder Morgan Cochin, LLC a Compliance Order incorporating the following remedial requirements to ensure the compliance of Kinder Morgan Cochin, LLC with the pipeline safety regulations: 1. 2. 3. In regard to Item Number 1 of the Notice pertaining to section 7.3.5 and 7.3.6 of API Standard 650, Kinder Morgan Cochin, LLC must successfully test Tank 4 and sufficiently document the test for Tank 4 per API Std 650 section 7.3.5 and 7.3.6. In regard to Compliance Order Item Number 1 (above) Kinder Morgan Cochin must complete this activity within 180 days of receipt of this order. It is requested (not mandated) that Kinder Morgan Cochin, LLC maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, Central 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. 5#

320205004_Consent Agreement and Order_03182021_text.pdf, page 1Official PDFMarch 18, 2021 VIA ELECTRONIC MAIL TO: dmarine@pembina.com Mr. Darren Marine Vice President, Transmission Pipelines Pembina Pipeline Corporation 4000, 585-8 Ave. SW Calgary, Alberta T2P1G1, Canada CPF No. 3-2020-5004 Dear Mr. Marine: Enclosed please find a Consent Order incorporating the terms of the Consent Agreement between the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Pembina Cochin, LLC, which was executed on March 17, 2021. Service of the Consent Order and Consent Agreement by electronic mail is deemed effective upon the date of transmission, or as otherwise 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: Mr. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA Mr. George Casey Hopkins, Vinson & Elkins, LLP, Counsel for Pembina Conchin, LLC, ghopkins@velaw.com Ms. Cassia Prentice, Legal Counsel, Pembina Cochin, LLC, cprentice@pembina.com CONFIRMATION OF RECEIPT REQUESTED#

320205004_Consent Agreement and Order_03182021_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 __________________________________________ In the Matter of ) Pembina Cochin LLC, ) CPF No. 3-2020-5004 a subsidiary of Pembina U.S. Corporation, ) ) ) ) Respondent. ) __________________________________________) CONSENT AGREEMENT AND ORDER WHEREAS, on March 19, 2020, pursuant to 49 C.F.R. § 190.207, the Director, Central Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), U.S. Department of Transportation (Director), issued a Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) to Kinder Morgan Cochin, LLC, which is now known as Pembina Cochin LLC (Pembina Cochin or Respondent).1 The Notice alleged that Respondent had violated the pipeline safety regulations in 49 C.F.R. Part 195 and proposed a civil penalty of $187,200; and WHEREAS, on April 22, 2020, Pembina Cochin submitted payment in the amount of $187,200, and on April 24, 2020, requested an extension to respond to the Notice. The company requested a second extension to respond on May 13, 2020, and on May 22, 2020, filed a response to the Notice, contesting the allegations of violation, the proposed civil penalty, and the proposed compliance order, and requesting an informal hearing; and WHEREAS, the Director and Pembina Cochin held a meeting telephonically on August 17 and October 29, 2020, to discuss resolution of this proceeding; and WHEREAS, as result of these good-faith discussions, PHMSA and Respondent (collectively, the Parties) have reached an agreement on the terms and conditions of a settlement, as set forth herein, and agree that this Consent Agreement and Order (Agreement) will serve to avoid further administrative proceedings or litigation, that it is the most appropriate means of resolving this proceeding, and that it will promote the public interest by improving the safety performance of Pembina Cochin’s pipeline system and advancing the enforcement and safety goals of PHMSA. NOW, THEREFORE, upon consent and agreement of the Parties, it is Ordered and Adjudged as follows: 1 Pembina U.S. Corporation is the parent company of Pembina Cochin LLC. Pembina Cochin LLC owns and operates the U.S. portion of the Cochin Pipeline.#

320205004_Consent Agreement and Order_03182021_text.pdf, page 3I. General Provisions. 1. For purposes of this Agreement, Pembina Cochin acknowledges that the portion of the Cochin Pipeline in the United States and the Cochin Kankakee Terminal located in Kankakee County, Illinois is 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. 2. Pembina Cochin further acknowledges that it received proper notice of PHMSA’s allegations 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. 3. The Parties agree to the terms of this Agreement, and Pembina Cochin agrees to hereby waive any further procedural requirements with respect to its issuance. Pembina Cochin further waives all rights to contest the validity of this Agreement, including all rights to administrative or judicial hearings or appeals. II. Findings of Fact and Violations. 4. Respondent acknowledges, and PHMSA hereby finds, that Pembina Cochin violated 49 C.F.R. § 195.307(c) (Item 1), as alleged in the Notice, by failing to pressure test Tank 4 at the company’s Kankakee, Illinois terminal in accordance with section 7.3.5 of API Standard 650. Specifically, Respondent was unable to provide any evidence that the water level for Tank 4 was filled to the maximum design liquid level. 5. Respondent further acknowledges, and PHMSA hereby finds, that Pembina Cochin violated 49 C.F.R. § 195.505(b) (Item 2), as alleged in the Notice, by failing to follow its own written operator qualification program to ensure through evaluation that individuals performing covered tasks are qualified. Specifically, Respondent utilized contractors to perform pig-receiver modifications at its Rogers Pump Station, and on the following day in the early morning, a leak occurred at said facility. Respondent’s internal investigation determined that the cause of the release was a contractor’s failure to thoroughly tighten the threaded fitting upon completion of certain modification work. III. Civil Penalty. 6. Pembina Cochin further agrees to pay a civil penalty in the amount $14,400 in connection with Item 1 of the Notice and $158,400 in connection with Item 2 of the Notice, for a total civil penalty amount of $172,800. 7. PHMSA agrees to use reasonable efforts to assist Pembina Cochin in recouping the excess civil penalty that has already been paid by Respondent to PHMSA, in amount of $14,400. IV. Corrective Measures. 8. PHMSA agrees to withdraw the Proposed Compliance Order as written in the Notice, and, instead, Respondent agrees to take the following Corrective Measures:#

320205004_Consent Agreement and Order_03182021_text.pdf, page 4a. Pembina Cochin will complete an Engineering Assessment, to be performed by third-party experts, to evaluate the fitness for service of Tank 4, using API 5792 finite element modeling of the applied stresses in the tank, weld residual stress models, other API 579 requirements along with Welding Research Council Bulletin 562, “Recommendations for Establishing the Minimum Pressurization Temperature (MPT) for Equipment,” and models for material properties in the fracture mechanics calculations. Pembina Cochin will provide to the Director the qualifications of the third-party experts and the results of the Engineering Assessment, including the impact on the maximum design level of Tank 4, within 60 days of the Effective Date of this Agreement; and b. From the Effective Date of this Agreement until December 31, 2023, or the date when Pembina Cochin performs an internal and external inspection of Tank 4 under API 653, 3 whichever is earlier, Pembina Cochin will implement the measures referenced in Appendix A attached hereto with respect to Tank 4. 9. The Director may grant an extension of time for completion of any of the work to be performed under Paragraphs 8(a) and 8(b) upon Respondent’s timely, written request that demonstrates both good cause for an extension and provides sufficient detail to enable the Director to evaluate Respondent’s request. A timely request should be submitted at least 15 calendar days prior to the date on which the work at issue is due to be submitted to the Director. 10. Respondent agrees to maintain documentation of the costs associated with implementation of the actions specified in Paragraphs 8(a) and 8(b), including Appendix A, and agrees to make this information available to PHMSA upon request. V. Miscellaneous. 11. Nothing in this Agreement affects or relieves Pembina Cochin 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 its authority to bring any enforcement action against Pembina Cochin pursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder, or any other provision of Federal or state law. 12. This Agreement does not waive or modify any Federal, state, or local laws or regulations applicable to Pembina Cochin’s pipeline system. This Agreement is not a permit or a modification of a permit under any Federal, state, or local laws or regulations. Pembina Cochin remains responsible for achieving and maintaining compliance with all applicable Federal, state, and local laws, regulations and permits. 13. 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 the 2 ASME - API 579-1/ASME FFS-1, Fitness-For-Service, June 2016. 3 API Standard 653, “Tank Inspection, Repair, Alteration, and Reconstruction,” 3rd edition, December 2001, (including addendum 1 (September 2003), addendum 2 (November 2005), addendum 3 (February 2008), and errata (April 2008)), which is incorporated by reference into 49 CFR Part 195.#

320205004_Consent Agreement and Order_03182021_text.pdf, page 5settlement other than those expressly contained in this Agreement, except that the terms of this Agreement may be construed by reference to the Notice. 14. This Agreement does not create rights in, or grant any cause of action to, any person not a party to this Agreement. PHMSA is not liable for any injuries or damages to persons or property arising from acts or omissions of Pembina Cochin or its officers, employees, or agents carrying out the work required by this Agreement. PHMSA, its officers, employees, agents, and representatives are not liable for any cause of action arising from any acts or omissions of Pembina Cochin or its contractors in carrying out any work required by this Agreement. 15. purchasers. This Agreement shall apply to and be binding on PHMSA and Pembina Cochin, its officers, directors, employees, successors and assigns, including, but not limited to, subsequent 16. For all transfers of ownership or operating responsibility of Pembina Cochin’s pipeline system, Respondent will provide notice of the transfer to PHMSA through the National Registry of Operators no later than 60 days after the transfer occurs, consistent with the requirements of 49 C.F.R. § 191.22(c)(2). VI. Enforcement 17. 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 civil penalties under 49 U.S.C. §60122, and referral of the case to the Attorney General for judicial enforcement, if PHMSA determines that Respondent is not complying with the terms of this Agreement in accordance with determinations made by the Director, or if appealed, in accordance with decisions of the Associate Administrator. VII. Effective Date. 18. The “Effective Date” is the date on which this Agreement has been signed by both Pembina Cochin and PHMSA. VIII. Termination. 19. Respondent may request that the Director close this case on or after December 31, 2023, or after the date when Pembina Cochin performs an internal and external inspection of Tank 4 under API 653, whichever is earlier. Closure of the case will result in termination of the Agreement. IX. Ratification. 20. The Parties’ undersigned representatives certify that they are fully authorized to enter into the terms and conditions of this Agreement and to execute and legally bind such party to this document.#

320205004_Consent Agreement and Order_03182021_text.pdf, page 6PEMBINA COCHIN LLC PIPELINE AND HAZARDOUS MATERIALS ADMINISTRATION, OFFICE OF PIPELINE SAFETY ___________________________ ___________________________ Name: Darren Marine Name: Alan K. Mayberry Title: Vice President, Transmission Pipelines Title: Associate Administrator for Pipeline Safety March 16, 2021 March 17, 2021 ___________________________ ___________________________ Date: Date:#

320205004_Closure Letter_12162024_(16-153531S)_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: SBurrows@Pembina.com; BBachmeier@Pembina.com; December 16, 2024 Mr. Scott Burrows President and Chief Executive Officer, Pembina Cochin, LLC 4000, 585-8 AVE SW Calgary, AB Canada T2P 1G1 RE: CPF 3-2020-5004 Dear Mr. Burrows: On March 18, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Pembina Cochin, LLC (Pembina) a Consent Order incorporating the terms of the Consent Agreement between the parties. This Consent Order included a Civil Penalty assessment and a requirement to take corrective actions on your pipeline. Based on our review of the documentation provided by your staff and confirmation of payment of the civil penalty, it has been determined that Pembina has complied with the terms of the Consent Order. Accordingly, this case is now closed, and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Gregory A. Ochs Director, Central Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration cc: Bob Bachmeier, Manager of Regulatory and Environmental, US Operations, Pembina Cochin, BBachmeier@Pembina.com#