MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation

party submissionOfficial PDF320205026_Operator Response to Notice_12182020.pdf#

320205026_Closure Letter_06282024_(16-152634S)_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: pierce.norton@oneok.com; mark.materna@oneok.com; Charles.misak@oneok.com; Jason.A.Smith@oneok.com June 28, 2024 Mr. Pierce Norton, President/CEO Magellan Pipeline Company, LLC 100 West 5th Street Tulsa, OK 74103 RE: CPF No. 3-2020-5026 Dear Mr. Norton: On June 28, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Magellan Midstream Partners, LP a Final Order the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation provided and confirmation of payment of the civil penalty on July 7, 2021, it has been determined that you have complied with the terms of the Final 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: Mr. Mark Materna, VP Refined Products & Crude Oil, Magellan Pipeline Company, LLC (mark.materna@oneok.com) Charles Misak, Director, Integrated Operations Services, Magellan Pipeline Company, LLC (Charles.misak@oneok.com Jason A. Smith, Vice President, Asset Integrity, Magellan Pipeline Company, LLC (Jason.A.Smith@oneok.com)#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 1Official PDFJune 28, 2021 VIA ELECTRONIC MAIL TO: mike.mears@magellanlp.com Mr. Michael Mears President & Chief Executive Officer Magellan Midstream Partners, LP One Williams Center P.O. Box 22186 Tulsa, Oklahoma 74172 Re: CPF No. 3-2020-5026 Dear Mr. Mears: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $52,500, and specifies actions that need to be taken by Magellan Midstream Partners, LP to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the compliance order completed, as determined by the Director, Central Region, this enforcement action will be closed. Service of the Final Order by electronic mail is effective upon the date of transmission as 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 cc: Mr. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA Mr. Jason Smith, Vice President, Asset Integrity, Magellan Pipeline Company, LP jason.smith@magellanlp.com Mr. Mark Materna, Director, Pipeline Integrity, Magellan Pipeline Company, LP mark.materna@magellanlp.com CONFIRMATION OF RECEIPT REQUESTED#

320205026_Final Order_06282021_(16-152634S)_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 ) Magellan Midstream Partners, LP, ) CPF No. 3-2020-5026 ) ) ) Respondent. ) ____________________________________) FINAL ORDER On various dates between December 11, 2018 and October 1, 2019, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted a pipeline safety inspection of the facilities and records of Magellan Midstream Partners, LP’s (MMP or Respondent) hazardous liquid pipeline system in Kansas, Nebraska, South Dakota, North Dakota, Missouri, Iowa, Minnesota, Illinois and Wisconsin. MMP stores and distributes refined petroleum products and crude oil, and is based in Tulsa, Oklahoma.1 As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent, by letter dated November 6, 2020, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that MMP had committed four violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of $52,500 for one of the alleged violations, and proposed that MMP take certain correction measures to comply with the pipeline safety regulations. The warning item required no further action, but warned the operator to correct the probable violation or face possible future enforcement action. On November 13, 2020, MMP requested a copy of the case file and an extension of time to respond to the Notice until December 18, 2020. The extension request was granted by the Director, Central Region the same day. MMP responded to the Notice by letter dated December 18, 2020 (Response). The company did not contest the allegations of violation but provided an explanation for each violation and requested to clarify and correct a statement contained in Item 5 of the Notice. Respondent did not request a hearing and therefore has waived its right to one. 1 Magellan Midstream Partners, LP website, About Us, available at https://www magellanlp.com/AboutUs/Default.aspx (last accessed June 15, 2021).#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 3CPF No. 3-2020-5026 Page 2 FINDINGS OF VIOLATION In its Response, MMP did not contest the allegations in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.116(f)(2), which states: § 195.116(f)(2) Valves. Each valve installed in a pipeline system must comply with the following: (a) . . . (f) Each valve must be marked on the body or the nameplate, with at least the following: (1) . . . (2) Class designation or the maximum working pressure to which the valve may be subjected. The Notice alleged that Respondent violated 49 C.F.R. § 195.116(f)(2) by incorrectly marking on the valve body or the nameplate the class designation or the maximum working pressure to which the valve may be subjected. Specifically, the Notice alleged that at MMP’s EDE #1-8” trap in the El Dorado East Station two valves were marked with an ANSI 400 rating (maximum working pressure of 960 psig). However, the maximum operating pressure (MOP) on the EDE #1-8” pipeline was documented as 1111 psig, and the designated maximum working pressure of the valves is 1150 psig based on the MOP list provided by MMP and reviewed by PHMSA. The Notice also proposed that MMP take certain corrective measures associated with this alleged violation as detailed in the Proposed Compliance Oder (PCO). Respondent did not contest this allegation of violation or the PCO associated with this Item, but did provide information related to improvements made to address the admitted noncompliance. Specifically, Magellan stated that “[o]n January 13, 2019, Magellan provided the PHMSA Inspector with a modification to the Management of Change Procedure, SIP-ADM-1 1.01, that requires an MOCR for the replacement of a 400 ANSI valve. Magellan also developed and implemented a new tag, MGLN-0046 in 5.02-ADM-001 Safety Sign Matrix, which reads ‘WARNING This ANSI 400 valve has a MOP of 1150 psi. Valve shall not be replaced or re- worked without MOCR and input from Asset Integrity’. Magellan has tagged each of the listed 400 ANSI valves that are rated for 1150 psig accordingly.”2 Accordingly, based upon a review of all of the evidence and the fact that MMP did not contest the underlying allegation of violation or the PCO, I find that Respondent violated 49 C.F.R. § 195.116(f)(2) by incorrectly marking on the valve body or the nameplate the class designation or the maximum working pressure to which the valve may be subjected. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), which states: § 195.452(b)(5) Pipeline integrity management in high consequence areas. 2 Response, at 2.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 4CPF No. 3-2020-5026 Page 3 (a) . . . (b) What program and practices must operators use to manage pipeline integrity? Each operator of a pipeline covered by this section must: (1) . . . (5) Implement and follow the program. The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement and follow its Integrity Management Program (IMP). Specifically, the Notice alleged that Section 6.4 Risk Analysis Overview of MMP’s IMP states that each analysis for facility piping systems will be documented per the System Equipment Review Form. In reviewing Respondent’s records, it was determined that 54 of the 71 facilities that could affect a high consequence area (HCA) did not have completed System Equipment Review Forms. Additionally, MMP’s IMP allows for the incorporation and analysis of data collected through several distinct programs, however, these individual programs were not collectively documented and evaluated on the System Equipment Review Forms to determine if additional preventative or mitigative measures were necessary for the facilities. Respondent did not contest this allegation of violation or the PCO associated with this Item. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement and follow its IMP. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)3, which at the time of the violation stated in relevant part: § 195.452(j) Pipeline integrity management in high consequence areas. (a) . . . (j) What is a continual process of evaluation and assessment to maintain a pipeline’s integrity? (1) General. After completing the baseline integrity assessment, an operator must continue to assess the line pipe at specified intervals and periodically evaluate the integrity of each pipeline segment that could affect a high consequence area. (2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to assure pipeline integrity. An operator must base the frequency of evaluation on risk factors specific to its pipeline, including the factors specified in paragraph (e) of this section. The evaluation must consider the results of the baseline and periodic integrity assessments, information analysis (paragraph (g) of this section), and decisions about remediation, and preventive and mitigative actions (paragraphs (h) and (i) of this section). The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j) by failing to complete periodic evaluations to assure pipeline integrity on all of its pipeline facilities. Specifically, the 3 49 C.F.R. § 195.452(j) was amended effective July 1, 2020. However, the above-referenced violation and subsequent safety inspection occurred prior to the date of amendment, and thus, said amendment is not applicable here.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 5CPF No. 3-2020-5026 Page 4 Notice alleged that MMP identified 71 facilities that were in a HCA or could affect an HCA. Of those 71 facilities, two facilities, the Columbia Pipeline Junction and the Wathena Pipeline Junction, had not been evaluated for all the risk factors specific to the facilities. At the time of the inspection, MMP provided documentation, which showed that several reviews, analyses, or assessments had not been completed for the two facilities, including System Equipment Review Form, System Equipment Review Analysis, Facility RISK Model Questionnaire, or a Facility Risk Ranking Assessment Tool. Consequently, MMP was unable to demonstrate that all necessary inspections, assessments, and evaluations had been completed to assure pipeline integrity as required by §195.452(j)(2). Respondent did not contest this allegation of violation and stated that it would pay the civil penalty upon receipt of a final order. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(j) by failing to complete periodic evaluations to assure pipeline integrity on all of its pipeline facilities. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(h), which states: § 195.505(h) Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) . . . (h) After December 16, 2004, provide training, as appropriate, to ensure that individuals performing covered tasks have the necessary knowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline facilities; . . . The Notice alleged that Respondent violated 49 C.F.R. § 195.505(h) by failing to have and follow procedures for ensuring through evaluation that individuals performing covered tasks have the necessary knowledge and skills to perform the covered tasks in a manner that ensures the safe operation of its pipeline facilities. Specifically, the Notice alleged that MMP was unable to demonstrate that the individuals who performed breakout tank inspections had the necessary knowledge of MMP’s covered task 27.1 Routine Monthly Inspection of Breakout Tanks as evidenced by the monthly tank inspection records. The Notice further alleged that MMP’s covered task list describes Task 27.1 Routine Monthly Inspection of Breakout Tanks as, “Breakout tanks must be inspected monthly per API 653. The inspection includes the foundation, the shell, flanges, valves, and the roof.” However, neither MMP’s procedure 7.10- ADM-009 nor form 07-FORM-0077 provides guidance or a location to record the condition of the roof. Additionally, MMP’s inspection records did not identify shell distortions, leaks, unmitigated corrosions pits, and other prevailing tank integrity threats as required by the breakout tank inspection procedures. Respondent did not contest the underlying allegation of violation or the PCO associated with this Item, but requested rescinding a reference in the Notice to the roof inspection criteria in API RP 1161, arguing that API RP 1161 is not incorporated by reference in 49 CFR Part 195 or Respondent’s procedures. I agree. Therefore the finding of violation in this Final Order does not contain reference to API RP 1161.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 6CPF No. 3-2020-5026 Page 5 Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.505(h) by failing to have and follow procedures for ensuring through evaluation that individuals performing covered tasks have the necessary knowledge and skills to perform the covered tasks in a manner that ensures the safe operation of its pipeline facilities. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.4 In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue doing business; the good faith of Respondent in attempting to comply with the pipeline safety regulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $52,500 for the violation cited above in Item 4. Item 4: The Notice proposed a civil penalty of $52,500 for Respondent’s violation of 49 C.F.R. § 195.452(j), for failing to complete periodic evaluations to assure pipeline integrity on all of its pipeline facilities. MMP neither contested the allegation nor presented any evidence or argument justifying a reduction in or elimination of the proposed penalty. The nature of the violation was activity-related due to the operator’s failure to complete the required evaluations, the operator did not self-report the violation, and the violation occurred in a HCA or HCA could-affect area. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $52,500 for violation of 49 C.F.R. § 195.452(j). Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $52,500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to 4 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 7CPF No. 3-2020-5026 Page 6 those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 3, and 5 in the Notice for violations of 49 C.F.R. §§ 192.116(f)(2), 195.452(b)(5), and 195.505(h), respectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 192.116(f)(2) (Item 1), Respondent must review all of its valves listed in the excel spreadsheet provided on November 1, 2019, and verify proper markings as required by §192.116(f) within 60 days of receipt of the Final Order.5 2. With respect to the violation of § 195.452(b)(5) (Item 3), Respondent must revise its procedures to ensure future facilities will be properly evaluated. Respondent must also complete all of its facility assessments and implement any required actions as soon as practicable. Within 60 days of receipt of the Final Order, Respondent must submit a plan with a list of all current facilities and the timing for assessment and associated actions to the Region Director for approval. Once the Region Director approves the plan, Respondent must complete the assessments per the approved plan and submit quarterly reports until completion of the plan. 3. With respect to the violation of § 195.505(h) (Item 5), Respondent must revise its Operator Qualifications Plan (OQ Plan) and provide additional training to ensure that individuals have the knowledge and skills necessary to identify shell distortions, leaks, unmitigated corrosions pits, and other prevailing tank integrity threats. The amended plan must be in accordance with Respondent’s procedures and also address proper documentation of these findings so that further tank assessments or remedial measures may be taken. Respondent must perform the above-referenced tasks as follows: a) Within 30 days upon receipt of the Final Order, Respondent must revise its OQ Plan and the plan’s referenced written procedures and training materials as applicable to monthly inspections of breakout tanks, as indicated above, 5 The Notice did not propose a date by which the corrective measures in Item 1 must be completed. Having considered the record, I find that a deadline of 60 days from the date of this Order is reasonable and appropriate.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 8CPF No. 3-2020-5026 Page 7 b) c) and provide the revised documents to the PHMSA Central Region Office. Within 90 days upon receipt of the Final Order, Respondent must train and qualify all of its individuals who independently conduct monthly breakout tank inspections, in accordance with the written procedures and training materials described in (a) above. Within 120 days upon receipt of the Final Order, Respondent must provide to the PHMSA Central Region Office the list of all individuals who independently conduct monthly breakout tank inspection, and the date that the training and qualification of each individual, as described in (b) above, was completed. 4. All documentation demonstrating compliance with each of the items outlined in this order must be submitted to the Director, Central Region, Pipeline and Hazardous Materials Safety Administration, 901 Locust Street, Kansas City, MO 64106. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. It is requested that Respondent maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. 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. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEM With respect to Item 2, the Notice alleged a probable violation of Part 195, but identified it as a warning item pursuant to § 190.205. The warning was for: 49 C.F.R. § 195.404(a) (Item 2) ─ Respondent’s alleged failure to maintain current maps and records of the location and identification of its pipeline systems for multiple pipeline facilities, and Respondent’s alleged failure to maintain current maps and records of the diameter, grade, type, and nominal wall thickness of all pipe. MMP presented information in its Response showing that it had taken certain actions to address the cited items. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action.#

320205026_Final Order_06282021_(16-152634S)_text.pdf, page 9CPF No. 3-2020-5026 Page 8 Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. The other terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. June 28, 2021 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

320205026_NOPV PCP PCO_11062020_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER VIA ELECTRONIC MAIL TO: jason.smith@magellanlp.com November 6, 2020 Mr. Michael Mears President and CEO Magellan Pipeline Company, LP One Williams Center, P.O. Box 22186 Tulsa, OK 74172 mike.mears@magellanlp.com and CPF 3-2020-5026 Dear Mr. Mears: From December 11, 2018 through October 1, 2019, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected your Magellan Midstream Partners, L.P. (MMP) hazardous liquid pipeline system in Kansas, Nebraska, South Dakota, North Dakota, Missouri, Iowa, Minnesota, Illinois and Wisconsin. 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:#

320205026_NOPV PCP PCO_11062020_text.pdf, page 21. §195.116 Valves. Each valve installed in a pipeline system must comply with the following: (a) . . . following: (1) . . . subjected. (f) Each valve must be marked on the body or the nameplate, with at least the (2) Class designation or the maximum working pressure to which the valve may be MMP violated § 195.116(f)(2) by incorrectly marking on the valve body or the nameplate the class designation or the maximum working pressure to which the valve may be subjected. At the EDE #1-8” trap in the El Dorado East Station two valves were marked with an ANSI 400 rating (maximum working pressure of 960 psig). However, the maximum operating pressure on the EDE #1-8” pipeline was documented as 1111 psig, and the designated the maximum working pressure of the valves is 1150 psig based on the MOP list provided by MMP and reviewed by PHMSA. MMP also provided PHMSA with internal documentation and copies of PHMSA Final Orders CPF 3521 and 3523 describing the justification for using ANSI 400 valves for the pipeline that operated at a pressure that exceeded the ANSI 400 valve rating. However, after reviewing the documentation provided to PHMSA, Final Orders CPF 3521 and 3523 indicated that the valves should be marked with the maximum working pressure to which the valve may be subjected. Furthermore, at the time of the inspection, MMP could not provide details when requested if an additional 139 mainline valves where properly marked with the class designation or the maximum working pressure to which the valves may be subjected. This is supported by a spreadsheet provided by MMP on November 1, 2019. 2#

320205026_NOPV PCP PCO_11062020_text.pdf, page 32. §195.404 Map and records. (a) Each operator shall maintain current maps and records of its pipeline systems that include at least the following information: (1) Location and identification of the following pipeline facilities: (i) Breakout tanks; (ii) Pump stations; (iii) Scraper and sphere facilities; (iv) Pipeline valves; (v) Facilities to which §195.402(c)(9) applies; (vi) Rights-of-way; and (vii) Safety devices to which §195.428 applies. (2) All crossings of public roads, railroads, rivers, buried utilities, and foreign pipelines. (3) The maximum operating pressure of each pipeline. (4) The diameter, grade, type, and nominal wall thickness of all pipe. MMP violated §195.404(a) by failing to maintain current maps and records of the location and identification of its pipeline systems for multiple pipeline facilities. On March 19, 2019, PHMSA inspectors discovered that the Argentine Meter Station piping and instrumentation diagram (P&ID) failed to accurately depict the custody transfer location. The P&ID also failed to identify where MMP owned facilities ended and Sinclair owned facilities began. On April 5, 2019, PHMSA inspectors discovered that the Lincoln Terminal P&ID failed to correctly identify thermal relief safety devices to which §195.428 applies with the correct maximum set points. On June 3-7, 2019, PHMSA inspectors discovered that the 2016 pipeline replacement project had not been documented in MMP’s official record keeping system PODs. The Fargo-Grand Forks #1-6” pipeline had been replaced in 2016 yet the database depicted an ANSI 400 valve installed on January 1, 1987. The ANSI 400 valve was replaced during the 2016 replacement project with a higher rated ANSI 600 valve. MMP also violated 49 C.F.R. §195.404(a) by failing to maintain current maps and records of the diameter, grade, type, and nominal wall thickness of all pipe. On June 3-7, 2019, PHMSA inspectors discovered that the 2016 pipeline replacement project had not been documented in MMP’s official record keeping system PODs. The Fargo-Grand Forks #1-6” pipeline had been replaced in 2016 yet the database depicted a repair sleeve installed on September 16, 2014. The repair sleeve was no longer in existence and was replaced with a new pipeline during the 2016 project. 3#

320205026_NOPV PCP PCO_11062020_text.pdf, page 43. §195.452 Pipeline integrity management in high consequence areas. (a) . . . (b) What program and practices must operators use to manage pipeline integrity? Each operator of a pipeline covered by this section must: (1) . . . (5) Implement and follow the program. MMP violated §195.452(b)(5) by failing to implement and follow its Integrity Management Program (IMP). Specifically, Section 6.4 Risk Analysis Overview of MMP’s IMP states that each analysis for facility piping systems will be documented per the System Equipment Review Form. MMP identified 71 facilities that were in a high consequence area (HCA) or could affect an HCA. Of those 71 facilities, 54 do not have a completed System Equipment Review Forms. MMP’s IMP also allows for the incorporation and analysis of data collected through several distinct programs. Examples of these programs include ultrasonic thickness inspections per API 510/570, vibration analysis of rotating equipment, and API 653 tank inspections. However, these individual programs were not collectively documented and evaluated on the System Equipment Review Forms to determine if additional preventive or mitigative measures were necessary for the facilities. Therefore, MMP failed to follow its IMP in performing analysis for 54 of its 71 facilities. 4. §195.452 Pipeline integrity management in high consequence areas. (a) . . . (j) What is a continual process of evaluation and assessment to maintain a pipeline’s integrity? (1) General. After completing the baseline integrity assessment, an operator must continue to assess the line pipe at specified intervals and periodically evaluate the integrity of each pipeline segment that could affect a high consequence area. (2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to assure pipeline integrity. An operator must base the frequency of evaluation on risk factors specific to its pipeline, including the factors specified in paragraph (e) of this section. The evaluation must consider the results of the baseline and periodic integrity assessments, information analysis (paragraph (g) of this section), and decisions about remediation, and preventive and mitigative actions (paragraphs (h) and (i) of this section). MMP violated §195.452(j)(2) by failing to complete periodic evaluations to assure pipeline integrity on all of its pipelines, including facilities. MMP identified 71 facilities that were in a HCA or could affect an HCA. Of those 71 facilities, two facilities, the Columbia Pipeline Junction and the Wathena Pipeline Junction, had not been evaluated for all the risk factors specific to the facilities. At the time of the inspection, MMP 4#

320205026_NOPV PCP PCO_11062020_text.pdf, page 5provided documentation, which showed that none of the following reviews, analyses, or assessments had been completed for these two facilities: System Equipment Review Form, System Equipment Review Analysis, Facility RISK Model Questionnaire, or a Facility Risk Ranking Assessment Tool. Consequently, MMP was unable to demonstrate that all necessary inspections, assessments, and evaluations had been completed to assure pipeline integrity as required by §195.452(j)(2). 5. §195.505 Qualification Program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) . . . (h) After December 16, 2004, provide training, as appropriate, to ensure that individuals performing covered tasks have the necessary knowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline facilities; and . . . MMP violated §195.505(h) by failing to have and follow its procedure for ensuring through evaluation that individuals performing covered tasks have the necessary knowledge and skills to perform certain covered tasks required by its Operator Qualification (OQ) Program in a manner that ensures the safe operation of its pipeline facilities. Specifically, MMP was unable to demonstrate that the individuals who performed breakout tank inspections had the necessary adequate knowledge of MMP’s covered task 27.1 Routine Monthly Inspection of Breakout Tanks as evidenced by the monthly tank inspection records. MMP’s covered task list describes Task 27.1 Routine Monthly Inspection of Breakout Tanks as, “Breakout tanks must be inspected monthly per API 653. The inspection includes the foundation, the shell, flanges, valves, and the roof.” Furthermore, the covered task list also references API RP 1161 Task 27.1-Perform Routine Inspection of Breakout Tanks (API 653 Monthly or DOT Annual). Section 3 step 5 of API RP 1161 Task 27.1-1 specifically states, “Visually inspect the tank roof for the following: coating conditions, holes, pitting, and corrosion; standing or pooling water or product; floating roof out of level.” However, neither MMP’s procedure 7.10-ADM-009 nor form 07- FORM-0077 provides guidance or a location to record the condition of the roof. Additionally, MMP’s inspection records did not identify shell distortions, leaks, unmitigated corrosions pits, and other prevailing tank integrity threats as required by the breakout tank inspection procedures. During PHMSA’s inspection, MMP’s Tank Integrity Manager made a comment that the company’s OQ training for breakout tanks had room for improvement. Therefore, MMP failed to have and follow a procedure for ensuring through evaluation that individuals performing covered tasks have the necessary knowledge and skills to perform certain covered tasks, specifically breakout tank 5#

320205026_NOPV PCP PCO_11062020_text.pdf, page 6inspections, required by its OQ Program in a manner that ensures the safe operation of its pipeline facilities. 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. We have reviewed the circumstances and supporting documentation involved for the above probable violation(s) and recommend that you be preliminarily assessed a civil penalty of $ 52,500 as follows: Item number PENALTY 4 $ 52,500 Warning Item With respect to item 2, 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 promptly correct these item. Failure to do so may result in additional enforcement action. Proposed Compliance Order With respect to items 1, 3, and 5, pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Magellan Midstream Partners, L.P. 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. 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). 6#

320205026_NOPV PCP PCO_11062020_text.pdf, page 7Following 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 3-2020-5026 and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Gregory A. Ochs Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Enforcement Proceedings Cc: Mr. Jason Smith, Vice President of Asset Integrity, Magellan Pipeline Company, LP One Williams Center, OTC-9,Tulsa, OK 74172, jason.smith@magellanlp.com 7#

320205026_NOPV PCP PCO_11062020_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Magellan Midstream Partners, L.P. a Compliance Order incorporating the following remedial requirements to ensure the compliance of Magellan Midstream Partners, L.P. with the pipeline safety regulations: 1. 2. 3. In regard to Item Number 1 of the Notice pertaining to MMP’s failure to properly mark their valves maximum working pressure, MMP shall review all of their valves listed in the excel spreadsheet provided on November 1, 2019 and verify proper markings as required by §192.116(f). In regard to Item Number 3 of the Notice pertaining to the failure to evaluate all of its facilities located in high consequence areas, MMP shall revise its procedures to ensure future facilities will be properly evaluated. MMP must also complete all of its facility assessments and implement any required actions as soon as practicable. Within 60 days of receipt of the Final Order, MMP must submit a plan with a list of all current facilities and the timing for assessment and associated actions to the Region Director for approval. Once the Region Director approves the plan, MMP must complete the assessments per the approved plan and submit quarterly reports until completion of the plan. In regard to Item Number 5 of the Notice pertaining to inadequacy of knowledge demonstrated by “operator qualified” individuals on MMP’s covered task 27.1, Routine Monthly Inspection of Breakout Tanks, MMP must revise its Operator Qualifications Plan (OQ Plan) and provide additional training to ensure that individuals have the knowledge and skills necessary to identify shell distortions, leaks, unmitigated corrosions pits, and other prevailing tank integrity threats. The amended plan must be in accordance with MMP’s procedures and also address proper documentation of these findings so that further tank assessments or remedial measures may be taken. MMP must perform the above-referenced tasks as follows: a) Within 30 days upon receipt of the Final Order, MMP must revise its OQ Plan and the plan’s referenced written procedures and training materials as applicable to monthly inspections of breakout tanks, as indicated above, and provide the revised documents to the PHMSA Central Region Office. b) Within 90 days upon receipt of the Final Order, MMP must train and qualify all of its individuals who independently conduct monthly breakout tank inspection, in accordance with the written procedures and training materials described in (a) above. c) Within 120 days upon receipt of the Final Order, MMP must provide to the PHMSA Central Region Office the list of all individuals who independently conduct monthly breakout tank inspection, and the date that 8#

320205026_NOPV PCP PCO_11062020_text.pdf, page 94. 5. the training and qualification of each individual, as described in (b) above, was completed. All documentation demonstrating compliance with each of the items outlined in this order must be submitted to Greg Ochs, Director, Central Region, Pipeline and Hazardous Materials Safety Administration, 901 Locust Street, Kansas City, MO 64106. It is requested (not mandated) that Magellan Midstream Partners, L.P maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Gregory Ochs 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. 9#