TRINITY PIPELINE GP LLC — Notice of Amendment

420075014M_notice letter_05022007.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 8701 South Gessner, Suite 11 10 Houston, TX 77074 NOTICE OF AMENDMENT CERTIFIED MAIL - RETURN RECEIPT REQUESTED May 2,2007 Mr. Barry F. Petty, Managing Partner Trinity C02 LLC 401 West Wall Street Midland, TX 79701 CPF 4-2007-5014M Dear Mr. Petty: On July 17-20, 2006, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your procedures for operations and maintenance in Hobbs, New Mexico. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within Trinity C02, LLC (Trinity), as described below: 1. 5195.402 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. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. A. 5195.402 Procedural manual for operations, maintenance, and emergencies.#

420075014M_notice letter_05022007.pdf, page 2(c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (10) Abandoning pipeline facilities, including safe disconnection from an operating pipeline system, purging of combustibles, and sealing abandoned facilities left in place to minimize safety and environmental hazards. For each abandoned offshore pipeline facility or each abandoned onshore pipeline facility that crosses over, under or through commercially navigable waterways the last operator of that facility must file a report upon abandonment of that facility in accordance with 9195.59 of this part. Trinity's procedures need to specify more detail in the process for abandonment of pipelines. B. 9195.406 Maximum operating pressure. (a) Except for surge pressures and other variations from normal operations, no operator may operate a pipeline at a pressure that exceeds any of the following: (1) The internal design pressure of the pipe determined in accordance with 9195.106. However, for steel pipe in pipelines being converted under 9195.5, if one or more factors of the design formula (9195.106) are unknown, one of the following pressures is to be used as design pressure: (i) Eighty percent of the first test pressure that produces yield under section N5.0 of Appendix N of ASME B31.8, reduced by the appropriate factors in 99195.106(a) and (e); or (ii) If the pipe is 323.8 mm (12% in) or less outside diameter and is not tested to yield under this paragraph, 1379 kPa (200 psig). (2) The design pressure of any other component of the pipeline. (3) Eighty percent of the test pressure for any part of the pipeline which has been pressure tested under Subpart E of this part. (4) Eighty percent of the factory test pressure or of the prototype test pressure for any individually installed component which is excepted from testing under 9195.305. (5) For pipelines under 99195.302(b)(l) and (b)(2)(i), that have not been pressure tested under Subpart E of this part, 80 percent of the test pressure or highest operating pressure to which the pipeline was subjected for 4 or more continuous hours that can be demonstrated by recording charts or logs made at the time the test or operations were conducted. Trinity needs to specify procedures for establishing Maximum Operating Pressure. C. 9195.406 Maximum operating pressure. (b) No operator may permit the pressure in a pipeline during surges or other variations from normal operations to exceed 110 percent of the operating pressure limit established under paragraph (a) of this section. Each operator#

420075014M_notice letter_05022007.pdf, page 3must provide adequate controls and protective equipment to control the pressure within this limit. Trinity's procedures need to specify that during surges or other variations from normal operations the pressure in the pipeline is not permitted to exceed 110 percent of the operating pressure limit established under paragraph (a) of this section and that adequate controls and protective equipment to control the pressure within this limit must be provided. D. 5195.569 Do I have to examine exposed portions of buried pipelines? Whenever you have knowledge that any portion of a buried pipeline is exposed, you must examine the exposed portion for evidence of external corrosion if the pipe is bare, or if the coating is deteriorated. If you find external corrosion requiring corrective action under Sec. 195.585, you must investigate circumferentially and longitudinally beyond the exposed portion (by visual examination, indirect method, or both) to determine whether additional corrosion requiring remedial action exists in the vicinity of the exposed portion. Trinity's procedures need to specify that if you find external corrosion during examination of exposed pipe you must investigate circumferentially and longitudinally beyond the exposed portion to determine whether additional corrosion requiring remedial action exists in the vicinity of the exposed portion. E. 5195.579 What must I do to mitigate internal corrosion? (a) General. If you transport any hazardous liquid or carbon dioxide that would corrode the pipeline, you must investigate the corrosive effect of the hazardous liquid or carbon dioxide on the pipeline and take adequate steps to mitigate internal corrosion. (b) Inhibitors. If you use corrosion inhibitors to mitigate internal corrosion, you must-- (1) Use inhibitors in sufficient quantity to protect the entire part of the pipeline system that the inhibitors are designed to protect; (2) Use coupons or other monitoring equipment to determine the effectiveness of the inhibitors in mitigating internal corrosion; and (3) Examine the coupons or other monitoring equipment at least twice each calendar year, but with intervals not exceeding 7 112 months. (c) Removing pipe. Whenever you remove pipe from a pipeline, you must inspect the internal surface of the pipe for evidence of corrosion. If you find internal corrosion requiring corrective action under Sec. 195.585, you must investigate circumferentially and longitudinally beyond the removed pipe (by visual examination, indirect method, or both) to determine whether additional corrosion requiring remedial action exists in the vicinity of the removed pipe. Trinity needs to specify procedures for mitigating internal corrosion. F. 5195.589 What corrosion control information do I have to maintain?#

420075014M_notice letter_05022007.pdf, page 4(c) You must maintain a record of each analysis, check, demonstration, examination, inspection, investigation, review, survey, and test required by this subpart in sufficient detail to demonstrate the adequacy of corrosion control measures or that corrosion requiring control measures does not exist. You must retain these records for at least 5 years, except that records related to 195.569,195.573(a) and (b), and 195.579(b)(3) and (c) must be retained for as long as the pipeline remains in service. Trinity's procedures need to specify that records for pipe-to-soil potentials and internal corrosion coupons will be retained for as long as the pipeline remains in service. 2. s195.402 Procedural manual for operations, maintenance, and emergencies. (c) Maintenance and normal operations. 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. A. s195.222 Welders: Qualification of welders. (a) Each welder must be qualified in accordance with section 6 of API 1104 (ibr, see 195.3 or section IX of the ASME Boiler and Pressure Vessel Code, (ibr, see § 195.3) except that a welder qualified under an earlier edition than listed in § 195.3 may weld but may not re-qualify under that earlier edition. Trinity's procedures need to reference the correct section pertaining to the latest incorporated by reference edition of API 11 04. The correct section for welder qualification is section 6 of API 1 104 1 91h ~dition. B. s195.222 Welders: Qualification of welders. (b) No welder may weld with a welding process unless, within the preceding 6 calendar months, the welder has- (1) Engaged in welding with that process; and (2) Had one welded tested and found acceptable under section 9 of API 1104 Trinity's procedures need to specify that welders may not weld with a particular welding process unless, within the preceding 6 calendar months, the welder has (1) Engaged in welding with that process; and (2) Had one weld tested and found acceptable under Section 9 of API 1104. C. s195.226 Welding: Arc burns. (b) An arc burn may be repaired by completely removing the notch by grinding, if the grinding does not reduce the remaining wall thickness to less than the minimum thickness required by the tolerances in the specification to which the pipe is manufactured. If a notch is not repairable by grinding, a cylinder of the pipe containing the entire notch must be removed.#

420075014M_notice letter_05022007.pdf, page 5Trinity's procedures need to specify that arc burn repairs require verification of removal of the metallurgical notch by nondestructive testing. D. 9195.266 Construction records. A complete record that shows the following must be maintained by the operator involved for the life of each pipeline facility: (a) The total number of girth welds and the number nondestructively tested, including the number rejected and the disposition of each rejected weld. Trinity's procedures need to specify that records of the total number of girth welds and the number nondestructively tested, including the number rejected and the disposition of each weld must be maintained for the life of the facility. Response to this Notice This Notice is provided pursuant to 49 U.S.C. 5 60108(a) and 49 C.F.R. 5 190.237. 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 of why 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 further notice to you and to issue a Final Order. If, after opportunity 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. 5 190.237). 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 your correspondence on this matter, please refer to CPF 4-2007-5014M and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Director, southwest Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Compliance Proceedings#