TENNESSEE GAS PIPELINE COMPANY — Notice of Probable Violation

party submissionOfficial PDF420121005_Operator Withdraw of Request for Hearing and Response to Notice_08312012.pdf#

420121005_Final Order_12312012_text.pdf, page 1Official PDFDECEMBER 31, 2012 Ms. Kim Watson President, Eastern Pipeline Group Tennessee Gas Pipeline Company, LLC Kinder Morgan Building 1001 Louisiana Street Houston, TX 77002 Re: CPF No. 4-2012-1005 Dear Ms. Watson: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $118,500, and specifies actions that need to be taken by Tennessee Gas Pipeline Company, LLC, to comply with the pipeline safety regulations. This is to acknowledge receipt of the full penalty amount, by wire transfer dated August 31, 2012. When the terms of the compliance order have been completed, as determined by the Director, Southwest Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Tom Martin, Vice President, KM Gas Pipeline, 1001 Louisiana Street, Houston, TX 77002 Mr. R. M. Seeley, Director, Southwest Region, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420121005_Final Order_12312012_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 ) Tennessee Gas Pipeline Company, LLC, ) ) ) ) Respondent. ) ____________________________________) CPF No. 4-2012-1005 FINAL ORDER Between January and October 21, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Tennessee Gas Pipeline Company, LLC (TGPL or Respondent), in Cleveland, Edinburg, and Robstown/ Victoria, Texas, and in Kinder, Natchitoches, Houma, and West Monroe, Louisiana. TGPL, a subsidiary of Kinder Morgan Energy Partners, LP, operates a 13,900-mile pipeline system that transports natural gas from the U.S. Gulf Coast to Texas, Louisiana, Arkansas, Kentucky, Tennessee, Ohio, Pennsylvania, West Virginia, New Jersey, New York, and the New England region. 1 As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated April 25, 2012, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that TGPL had violated 49 C.F.R. §§ 191.15, 192.229, 192.605, 192.743 and 192.805, assessing a civil penalty of $118,500 for the alleged violations, and ordering Respondent to take certain measures to correct the alleged violations. The warning items required no further action but warned the operator to correct the probable violations or face future potential enforcement action. Respondent responded to the Notice by letter dated July 9, 2012 (Response). TGPL requested an extension of time to respond and requested a hearing. By letter dated August 31, 2012, Respondent withdrew its request for a hearing and thereby authorized the entry of this Final Order without further notice (Supplemental Response). The company did not contest the allegations of violation and paid the proposed civil penalty of $118,500, as provided in 49 C.F.R. § 190.227. Payment of the penalty serves to close the case with prejudice to Respondent. 1 At the time of the inspection, the facilities in question were operated by El Paso Pipeline Partners, LP (EPNG). In May 2012, Kinder Morgan acquired EPNG and TGPL. http://www.kindermorgan.com/business/gas pipelines/east/TGP/ (last accessed on November 7, 2012).#

420121005_Final Order_12312012_text.pdf, page 32 FINDINGS OF VIOLATION In its Response, TGPL did not contest the allegations in the Notice that it violated 49 C.F.R. Parts 191 and 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.15(a), which states: § 191.15 Transmission and gathering systems: Incident report. (a) Except as provided in paragraph (c) of this section, each operator of a transmission or a gathering pipeline system shall submit Department of Transportation Form RSPA F 7100.2 as soon as practicable but not more than 30 days after detection of an incident required to be reported under § 191.5.2 The Notice alleged that Respondent violated 49 C.F.R. § 191.15(a) by failing to submit a written incident report on RPSA Form 7100.23 (Form 7100.2 ) as soon as practicable, but not more than 30 days, after detection of an incident required to be reported under 49 C.F.R. § 191.5.4 Specifically, it alleged that on July 26, 2010, a pinhole leak occurred in a girth weld on the bottom of Respondent’s pipeline, resulting in a release of natural gas. TGPL did not submit Form 7100.2 until September 14, 2010, approximately 50 days after detection of the incident.5 Respondent did not contest this allegation of violation. Accordingly, based upon a review of the evidence, I find that Respondent violated 49 C.F.R. § 191.15(a) by failing to submit an incident report on RSPA Form 7100.2 as soon as practicable, but not more than 30 days, after detection of an incident required to be reported under 49 C.F.R. § 191.5. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.229(c)(1), which states: § 192.229 Limitations on welders. (a) … (c) A welder qualified under § 192.227(a)-- (1) May not weld on pipe to be operated at a pressure that produces a hoop stress of 20 percent or more of [Specified Minimum Yield Strength] SMYS unless within the preceding 6 calendar months the welder has had one weld tested and found acceptable under the sections 6 or 9 of [American Petroleum Institute] API Standard 1104 (incorporated by reference, see § 192.7). Alternatively, welders may maintain an ongoing qualification status by performing welds tested and found acceptable 2 The Notice erroneously cited § 191.15(a) as it had been amended, effective November 26, 2010. The amendment, however, did not make any substantive changes in the reporting requirement. 3 PHMSA Form 7100-2, formerly named Form RSPA F 7100.2. 4 Sections 191.5 and 191.3 provide that incidents must be reported if they involve a release of gas from a pipeline, a death or personal injury necessitating in-patient hospitalization, or estimated property damage of $50,000 or more. 5 Pipeline Safety Violation Report (Violation Report) (April 26, 2011) (on file with PHMSA), at 78 and Exhibit 1.#

420121005_Final Order_12312012_text.pdf, page 43 under the above acceptance criteria at least twice each calendar year, but at intervals not exceeding 7½ months. A welder qualified under an earlier edition of standard listed in § 192.7 of this part may weld but may not requalify under that earlier edition;…. The Notice alleged that Respondent violated 49 C.F.R. § 192.229(c)(1) by failing to ensure that welders did not weld on pipe operated at a pressure producing a hoop stress of 20 percent or more of SMYS unless the welder has had one weld tested and found acceptable under Sections 6 or 9 of API Standard 1104 within the past six months. Specifically, the Notice alleged that PHMSA’s inspection found multiple instances, as more fully described in the Notice and Violation Report, where welders on Respondent’s pipeline had not been qualified within the preceding six calendar months in accordance with Sections 6 or 9 of API Standard 1104.6 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.229(c)(1) by failing to ensure that welders did not weld on pipe operated at a pressure that produces a hoop stress of 20 percent or more of SMYS unless the welder had one weld tested and properly qualified within the preceding six calendar months in accordance with Sections 6 or 9 of API Standard 1104. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a), which states: § 192.605 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least once each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a) by failing to follow its own manual of written procedures for conducting operations and maintenance (O&M) activities. Specifically, it alleged that TGPL failed to follow its Operating and Maintenance Procedures, Section 302: Pressure Control and Overpressure Protection, Sub Section 10, which required TGPL employees to witness, document, and provide a witness signature on either a company form or an operator-provided document indicating that the testing and maintenance activity had been completed. 7 6 Violation Report at 7-31 and Exhibits 2A-2D. 7 TGPL’s O&M Procedure Section 302: Pressure Control and Overpressure Protection, Sub Section 10, stated: “The inspection, testing and maintenance of overpressure equipment located on pipeline facilities connected to El Paso facilities but operated by other companies must be witnessed by Operations personnel qualified for that task.” Further, Appendix D of this section required documentation that the activity had been witnessed by Operations personnel qualified for the task. Violation Report Exhibit 3.#

420121005_Final Order_12312012_text.pdf, page 54 Specifically, the Notice alleged that during 2007 through the time of the inspection, TGPL failed to follow its own procedure for witnessing and documenting the testing and maintenance of overpressure protection equipment installed at the company’s HILCORP Station. The company’s records show that the last time its personnel witnessed the activity was on June 16, 2006. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.605(a) by failing to follow its manual of written procedures for conducting O&M activities. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a), as quoted above, by failing to follow its own manual of written procedures for emergency response. Specifically, the Notice alleged that TGPL failed to follow its Operating and Maintenance Procedures 603: Emergency Plan/Notification and Investigation, Section 6, which required that appropriate location employees be trained once each calendar year on the company’s emergency response procedures and that the dates of training and the names of the instructors and trainees present be documented, with a copy of the documentation filed at the designated location.”8 According to the Notice, the company’s records revealed that several individuals had not been trained for one or more years, as more fully described in the Violation Report.9 During PHMSA’s inspection, the company was unable to provide records or demonstrate that the company’s employees and/or contractors had been trained on TGPL’s plan for emergency response. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.605(a) by failing to follow its own manual of written procedures for emergency response. Item 7: The Notice alleged that Respondent violated 49 C.F.R. § 192.743(a) which states: § 192.743 Pressure limiting and regulator stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in § 192.739(b), the capacity must be consistent with the pressure limits of § 192.201(a). This capacity must be determine at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. 8 TGPL Operating and Maintenance Procedures 603: Emergency Plan/Notification and Investigation, Section 6 states: “The appropriate location employees will be trained once each calendar year in the pipeline or plant emergency operating procedures. The methods of training (instruction, discussion, testing, emergency simulation, review of actual emergency, etc.), the dates of training, the instructors, and the trainees present will be documented. The training should be conducted at least once each calendar year and reviewed with all area employees. A copy of the documentation will be filed at the designated location.” Violation Report, Exhibit 4. 9 Violation Report, Exhibit 4.#

420121005_Final Order_12312012_text.pdf, page 65 The Notice alleged that Respondent violated 49 C.F.R. § 192.743(a) by failing to determine, at intervals not exceeding 15 months but at least once each calendar year, that the pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they were connected. Specifically, the Notice alleged that TGPL failed to conduct the required tests for two pressure relief devices at its East Bernard Compressor Station for three years, as more fully described in the Violation Report.10 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.743(a) by failing to determine, at intervals not exceeding 15 months but at least once each calendar year, that the pressure relief devices at the East Bernard Compressor Station had sufficient capacity to protect the facilities to which they were connected. Item 8: The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states: § 192.805 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) . . . (b) Ensure through evaluation that individuals performing covered tasks are qualified; . . . . The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through evaluation that an employee performing a covered task was properly qualified. Specifically, the Notice alleged that a TGPL employee performed covered task “038MST: Inspect/troubleshoot/ Repair Pressure Regulator (Worker Device),” when the employee’s qualification records did not show that the individual had been qualified to perform the task. 11 The PHMSA inspection revealed that during annual breakdown inspections on August 16, 2007, and April 2, 2008, the employee in question allegedly installed a new Teflon seal disc kit and an “O” ring kit in the pilot regulator located at the company’s station # 9 B-Master Fuel. The Notice further alleged that the employee in question had not been directed and observed by a qualified individual when covered Task 038MST was performed. The employee had been qualified on this covered task on March 17, 2004, but the task constituted a Level A task that required subsequent qualification at an interval of three years but not to exceed 39 months.12 The employee’s qualification had expired on or about June 17, 2007. At the time that the covered task was performed, the employee’s qualification had been expired approximately two months as of August 16, 2007, and 10 months as of April 2, 2008. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through evaluation that an employee performing a covered task had been properly qualified. 10 Violation Report at 59 and Exhibit 7. 11 Violation Report, Exhibit 8. 12 Id.#

420121005_Final Order_12312012_text.pdf, page 76 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 $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations. 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; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. 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 $118,500 for the violations cited above. Item 1: The Notice proposed a civil penalty of $11,400 for Respondent’s violation of 49 C.F.R. § 191.15(a), for failing to submit a written incident report as soon as practicable, but not more than 30 days, after detection of the incident required to be reported under 49 C.F.R. § 191.5. Specifically, on July 26, 2010, an incident on Respondent’s pipeline resulted in a release of natural gas but TGPL did not submit Form 7100.2 until September 14, 2010, approximately 50 days after detection of the incident. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $11,400 for violation of 49 C.F.R. § 191.15(a). Item 2: The Notice proposed a civil penalty of $16,100 for Respondent’s violation of 49 C.F.R. § 192.229(c)(1), for failing to ensure that welders did not weld on pipe to be operated at a pressure producing a hoop stress of 20 percent or more of SMYS unless the welders had one weld tested and found acceptable under Sections 6 or 9 of API Standard 1104 within the previous six months. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $16,100 for violation of 49 C.F.R. § 192.229(c)(1). Item 3: The Notice proposed a civil penalty of $15,700 for Respondent’s violation of 49 C.F.R. § 192.605(a), for failing to follow its own written Operating and Maintenance Procedures, Section 302: Pressure Control and Overpressure Protection, Sub Section 10, which required TGPL employees to document that an O&M activity had been completed. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $15,700 for violation of 49 C.F.R. § 192.605(a). Item 4: The Notice proposed a civil penalty of $17,400 for Respondent’s violation of#

420121005_Final Order_12312012_text.pdf, page 87 49 C.F.R. § 192.605(a), for failing to follow its own written procedures for emergency response, as set forth in its Operating and Maintenance Procedures 603: Emergency Plan/Notification and Investigation, Section 6. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $17,400 for violation of 49 C.F.R. § 192.605(a). Item 7: The Notice proposed a civil penalty of $42,700 for Respondent’s violation of 49 C.F.R. § 192.743(a), for failing to determine, at intervals not exceeding 15 months but at least once each calendar year, that the pressure relief devices at the East Bernard Compressor Station had sufficient capacity to protect the facilities. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $42,700 for violation of 49 C.F.R. § 192.743(a). Item 8: The Notice proposed a civil penalty of $15,200 for Respondent’s violation of 49 C.F.R. § 192.808(b), for failing to ensure through evaluation that an employee performing a covered task had been properly qualified to perform the task. TGPL paid the proposed penalty for this allegation of violation, which serves to close the case with prejudice to Respondent. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $15,200 for violation of 49 C.F.R. § 192.805(b). In summary, having reviewed the record and considered the assessment criteria, I assess Respondent a total civil penalty of $118,500, which has already been paid by Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 7 in the Notice for violation of 49 C.F.R. § 192.743(a). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas 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 § 192.743(a) (Item 7), Respondent must perform an audit to ensure that pressure regulators and relief devices that protect TGPL’s East Bernard Compressor Station from overpressure are in compliance with § 192.743. As part of the audit, Respondent must: A. Develop a plan to calculate the capacity of regulators and relief valves installed on TGPL’s facility. B. Conduct a survey of overpressure protection devices currently installed on TGPL’s natural gas pipeline system. The survey must evaluate the overpressure protection devices and verify the data collected, such as the inlet and outlet size, the orifice area and the coefficient of actual discharge, in order to perform sizing#

420121005_Final Order_12312012_text.pdf, page 98 calculations. TGPL’s D.O.T. Compliance Services Group must ensure that the highest peak throughput provided by the company’s Plant Service Group is accurate. C. Identify deficiencies observed during the review of personnel performance in preparing and following TGPL procedures for calculating sizing capacities. TGPL must integrate the findings and amend its procedures. D. Based upon results of the plan, verify that the regulator and relief devices installed on TGPL’s facilities have adequate capacities, as required by 49 CFR § 192.743. If the capacity is found to be insufficient, TGPL must install/modify the equipment to provide the required capacity. TGPL must complete Item A within 30 days and Items B, C, and D within 365 days following receipt of the Final Order. TGPL must also submit documentation to demonstrate completion of the items above to Mr. R. M. Seeley, Region Director, Southwest Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration. 2. It is requested that TGPL 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. 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. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $100,000 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 ITEMS With respect to Items 5, 6, and 9, the Notice alleged probable violations of Part 192 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warning(s) were for: 49 C.F.R. § 192.615(b)(3) (Item 5) ─ Respondent’s alleged failure to review employee activity to determine whether the company’s emergency procedures were effectively followed during an emergency. Specifically, TGPL did not have adequate documentation to demonstrate that the company had reviewed its#

420121005_Final Order_12312012_text.pdf, page 109 employees’ activities directly following an August 2007 emergency to verify the effectiveness of its procedures; 49 C.F.R. § 192.736(b)(1)-(2) and (c) (Item 6) ─ Respondent’s alleged failure to maintain gas detection and alarm equipment at TGPL’s Cleveland and Jasper compressor stations. Specifically, random field tests found gas detectors had inoperable building horns (audible alarm) and strobe lights (visual alarm) to warn persons about to enter the building and persons inside the building of the danger; and 49 C.F.R. § 192.706(a) (Item 9) ─ Respondent’s alleged failure to conduct a leakage survey in a newly identified Class 3 location, using leak detector equipment. Specifically, TGPL allegedly did not conduct a leakage survey of a newly identified class location upgrade in June of 2007, and did not include the section of pipeline in the company’s November 2007 leakage survey. TGPL did not survey the section of pipe until April 10, 2008. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

420121005_NOPV PCP PCO_04252012_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED April 25, 2012 Mr. William Cope Vice President, Eastern Operations Tennessee Gas Pipeline Company 569 Brookwoood Center, Suite 501 Birmingham, AL 35209 CPF 4-2012-1005 Dear Mr. Cope: On multiple occasions from January through October 21, 2011, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code was onsite and inspected Tennessee Gas Pipeline Company (TGPL) in Cleveland, Edinburg, Robstown/Victoria, Texas and Kinder, Natchitoches, Houma, and West Monroe in Louisiana. TGPL is part of the El Paso Pipeline Group (EPPG). As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s) are: 1. §191.15 Transmission Systems, gathering systems, and liquefied natural gas facilities. Incident report. (a) Transmission or Gathering. Each operator of a transmission or a gathering pipeline system must submit DOT Form PHMSA F 7100.2 as soon as practicable but not more than 30 days after detection of an incident required to be reported under § 191.5 of this part.#

420121005_NOPV PCP PCO_04252012_text.pdf, page 2TGPL failed to submit an incident report within 30 days for the 523M-100 pipeline system incident (a pinhole leak in girth weld at approximately the 6:00 o’clock position on the bottom of the pipe caused release of natural gas) that occurred on July 26, 2010. This incident was reported under NRC # 948908. TGPL submitted the Form 7100.2 for this incident on September 14, 2010 stating this is an original as well as final report. 2. §192.229 Limitations on welders. (c) A welder qualified under §192.227(a)– (1) May not weld on pipe to be operated at a pressure that produces a hoop stress of 20 percent or more of SMYS unless within the preceding 6 calendar months the welder has had one weld tested and found acceptable under the sections 6 or 9 of API Standard 1104 (incorporated by reference, see §192.7). Alternatively, welders may maintain an ongoing qualification status by performing welds tested and found acceptable under the above acceptance criteria at least twice each calendar year, but at intervals not exceeding 7 ½ months. A welder qualified under an earlier edition of a standard listed in §192.7 of this part may weld but may not requalify under that earlier edition; and.. On multiple occasions, TGPL allowed welders to weld on their pipeline without proper testing of the welder’s weld. Related to this requirement TGPL maintains TGPL Procedure “WM 020: General Welding Requirements.” Section 2, item 6 states: “The welding inspector is responsible for ensuring that no welder shall weld gas piping unless, within the preceding 6 calendar months, the welder has made a weld in accordance with either API 1104 or ASME BPV and had it tested either destructively or non-destructively in accordance with API 1104.” TGPL reported a failure under NRC # 961743 and as a result the company replaced the failed section (Project # 150385) on 12/11/2010. While reviewing records associated with qualification of welders used on this project, the PHMSA inspector found the company welder was originally qualified on 10/06/09. Although, TGPL provided a welding coupon test report indicating the welder qualification was renewed by radiography on 07/27/2010, it does not meet the code requirement. TGPL welder went beyond the allowed six months timeframe and he cannot be re- qualified by just radiography. The welder is required to qualify by more comprehensive test to regain his qualification which is by means of destructive test. As a result, the welder’s original qualification expired on approximately 4/6/2010. Prior to making a tie-in weld on 12/11/2010 (project # 150385); the welder should have been required to 2#

420121005_NOPV PCP PCO_04252012_text.pdf, page 3repeat his original qualification. Instead, TGPL’s welding inspector allowed the welder to weld on this project after exceeding the six months without having the weld tested. During the inspection PHMSA found additional instances where a welder welded without proper qualification. While reviewing TGPL’s project PID 127375 in the Corpus Christi area, the PHMSA inspector found that the company welder was re-qualified by radiography on 04/26/2007. TGPL did not provide documentation indicating that the same welder had one weld tested and found acceptable under the sections 6 or 9 of API Standard 1104 within the preceding six months since his last qualification. As a result, welder qualification expired on approximately 10/27/2007. Although, TGPL provided a welding coupon test report indicating the welder qualification was renewed by radiography on 03/19/2008, it does not meet the code requirement. TGPL welder went beyond the allowed six months timeframe and he cannot be re-qualified by just radiography. The welder is required to qualify by more comprehensive test to regain his qualification which is by means of destructive test. The company welding inspector allowed this welder to make one side of the three welds (BTH1, BTH2, and BTH3) on project PID 127375 between 7/22/2008 and 8/17/2008. According to the documentation provided by TGPL, the PHMSA inspector learned that all three welds failed and were subsequently repaired. Of the three failed welds that were repaired, one failed again and resulted in a cut out. While reviewing welder qualification records associated with TGPL project PID 140649 in Iberia Parish, LA, TGPL failed to provide documentation indicating three company welders had one weld tested and found acceptable under the sections 6 or 9 of API Standard 1104 within preceding six months since their last qualification. Welder 1 was originally qualified on 10/06/2009. TGPL did not provide documentation indicating welder 1 qualification was renewed by radiography within the preceding 6 calendar months since 10/06/2009. Welder 2 qualification was renewed by radiography on 4/15/2009. TGPL did not provide documentation indicating welder 2 qualification was renewed by radiography within the preceding 6 calendar months since 4/15/2009. Welder 3 qualification was renewed by radiographic inspection on 4/17/2009. TGPL did not provide documentation indicating welder 3 qualification was renewed by radiography within the preceding 6 calendar months since 4/17/2009. Although, TGPL provided a welding coupon test reports indicating welders qualification was renewed by radiography on 7/27/2010 for welder 1, 2/18/2010 for welder 2 and 2/18/2010 for welder 3, it does not meet the code requirement. All three welders went beyond the allowed six months timeframe and cannot re-qualify by radiography. These welders required to qualify by more comprehensive test to regain their qualification which is by means of destructive test. As a result, all three welders’ qualification expired on approximately 4/6/2010, 10/15/2009, and 10/17/2009 respectively. 3#

420121005_NOPV PCP PCO_04252012_text.pdf, page 4The company welding inspector allowed these three welders to make welds on project PID 127375 between 10/4/2010 and 11/19/2010 (in-service date: 11/19/2010). While reviewing the welder qualification records associated with TGPL project PID 151548 in Natchitoches area, the PHMSA inspector found a company welder was originally qualified on 10/06/2009. Although, TGPL provided a welding coupon test report indicating the welder qualification was renewed by radiography on 07/27/2010, it does not meet the code requirement. TGPL welder went beyond the allowed six months timeframe and he cannot be re-qualified by just radiography. The welder is required to qualify by more comprehensive test to regain his qualification which is by means of destructive test. As a result, welder qualification expired on approximately 4/6/2010. The company welding inspector allowed this welder to make weld # A21T on aforementioned project on 6/7/2011. 3. §192.605 Procedure manual for operations, maintenance, and emergency (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also included and updated by the operator at intervals not exceeding 15 months, but at least once each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. TGPL failed to follow their procedures relating to the oversight of the testing for over pressure protection. Specifically, PHMSA found that TGPL failed to witness testing and maintenance of overpressure equipment located on the pipeline facility that’s connected to EPPG’s facility but operated by another company, as required by the company procedure for four consecutive years. TGPL’s Operating and Maintenance procedures, Section 302: Pressure Control and Overpressure Protection, Sub Section 10 states: “The inspection, testing and maintenance of overpressure equipment located on pipeline facilities connected to El Paso facilities but operated by other companies must be witnessed by Operations personnel qualified for that task. ” Further, Appendix D of this section states that documentation that this activity was witnessed by Company personnel must also be completed. A witness signature on either the Company form or operator provided document is required. ” TGPL failed to witness testing and maintenance of overpressure protection equipment installed at HILCORP Station, (company station number 12497, main line: 500-1, mile post 507G- 109+3.16) during 2007 through the time of inspection. According to the documentation 4#

420121005_NOPV PCP PCO_04252012_text.pdf, page 5provided by TGPL, the last time the company employee witnessed the inspection activity to assure that the activity was being performed safely in manner such that the OPP equipment will be protective to TGPL’s facility was on June 16, 2006. The PHMSA inspector visited this site during the field portion of the audit and learned there is a relief valve, Hi/Lo setting and block valve protecting TGPL’s facility. These overpressure protection equipment is being inspected by a contractor hired by HILCORP who submitted the inspection completion report for the aforementioned years. The TGPL’s employee completed the regulator and relief valve inspection report based on results submitted by the contractor but, failed to witness it for the calendar years 2007, 2008, 2009, and 2010. 4. §192.605 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least once each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. (e) Surveillance, emergency response, and accident investigation. The procedures required by §§192.613(a), 192.615, and 192.617 must be included in the manual required by paragraph (a) of this section. §192.615 Emergency plans. (a) Each operator shall establish written procedures to minimize the hazard resulting from a gas pipeline emergency. At a minimum, the procedures must provide for the following: (1) Receiving, identifying, and classifying notices of events which require immediate response by the operator. (2) Establishing and maintaining adequate means of communication with appropriate fire, police, and other public officials. (3) Prompt and effective response to a notice of each type of emergency, including the following: (i) Gas detected inside or near a building. (ii) Fire located near or directly involving a pipeline facility. (iii) Explosion occurring near or directly involving a pipeline facility. (iv) Natural disaster. (4) The availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency. (5) Actions directed toward protecting people first and then property. 5#

420121005_NOPV PCP PCO_04252012_text.pdf, page 6(6) Emergency shutdown and pressure reduction in any section of the operator's pipeline system necessary to minimize hazards to life or property. (7) Making safe any actual or potential hazard to life or property. (8) Notifying appropriate fire, police, and other public officials of gas pipeline emergencies and coordinating with them both planned responses and actual responses during an emergency. (9) Safely restoring any service outage. (10) Beginning action under §192.617, if applicable, as soon after the end of the emergency as possible. (11) Actions required to be taken by a controller during an emergency in accordance with § 192.631. (b) Each operator shall: (2) Train the appropriate operating personnel to assure that they are knowledgeable of the emergency procedures and verify that the training is effective. TGPL failed to follow a portion of its operating and maintenance procedures for training personnel for emergency response. At the time of the inspection, TGPL failed to provide records indicating company employees and/or contract operators were trained on company’s emergency plan. TGPL Operating and Maintenance Procedures 603: Emergency Plan/Notification and Investigation, section 6 states: “The appropriate location employees will be trained once each calendar year in the pipeline or plant emergency operating procedures. The methods of training (instruction, discussion, testing, emergency simulation, review of actual emergency, etc), the dates of training, the instructors, and the trainees present will be documented. The training should be conducted at least once each calendar year and reviewed with all area employees. A copy of the documentation will be filed at the designated location.” While reviewing records at the Cleveland area, the PHMSA inspector found an employee that was not trained during the calendar year 2008. The documentation provided at the time of the inspection shows this employee was trained on 7/12/2007, and was not trained again until 1/21/2009. The employee was trained for 2010 and the current year. While reviewing records at the Jasper Area (part of Cleveland Unit), the PHMSA inspector found that an employee that was found not trained during the calendar year 2007 and 2010. At the time of the inspection, TGPL provided documentation showing this employee was trained on 02/24/2009. TGPL also showed documentation stating this employee attended training in 2008. The employee was found trained for the current year. In the Houma area, TGPL failed to provide records indicating two employees were trained on company’s emergency plan during the calendar year 2009. One employee was trained on 10/31/2008, and he was not trained again until 4/16/2010. The second employee was trained on 6#

420121005_NOPV PCP PCO_04252012_text.pdf, page 78/26/2008 and was not trained again until 4/20/2010. Both employees were found trained for the current year. In the Natchitoches area, a PHMSA inspector learned that two contract operators were responsible to operate compressors at station 40, Building “A” and authorized to make safe by initiating station ESD, should an emergency occurs. When the PHMSA inspector requested TGPL to provide contract operator’s training on emergency operating procedures, TGPL was unable to provide documentation showing these two contract operators were trained during the calendar year 2007 through the time of the inspection. 5. §192.615 Emergency plans. (b) Each operator shall: (3) Review employee activities to determine whether the procedures were effectively followed in each emergency. TGPL failed to review employee activity to determine whether the procedures were effectively followed in an emergency which reported to the NRC. According to TGPL procedure 603: Emergency Plan/Notification and Investigation, an “emergency” is defined as an unforeseen combination of circumstances which call for immediate action to assure the safety of the general public and minimize the time requirements necessary to isolate, blow down, repair, and reactivate affected facilities. The same procedure, under Record, Section 2 states: “Documentation of the review of the effectiveness of the procedures directly following an emergency or after any failure and of the verification of the effectiveness of emergency training will be captured on the Emergency Response Evaluation form. ” On August 6, 2007, TGPL reported an incident No. 20070102—3636 (original report date: 8/31/2007) due to a 3/8” pipe nipple where a relief valve 29-2 sensing line connected to the transmission pipeline had cracked in the threads of the nipple. This resulted in a discharge of gas thru an 8” relief valve. Both the pipeline and relief valve were placed back in service after repair. When the PHMSA inspector requested Emergency Response Evaluation form to review, TGPL failed to provide it. The evidence demonstrates that the operator violated § 192.615(b) (3) by failing to review the activities of employees. In the event that such reviews were, in fact performed, the evidence demonstrates the operator violated § 192.605(a) by failing to follow their procedures which require a record of the review. 6. §192.736 Compressor stations: Gas detection. 7#

420121005_NOPV PCP PCO_04252012_text.pdf, page 8(b) Except when shutdown of the system is necessary for maintenance under paragraph (c) of this section, each gas detection and alarm system required by this section must- (1) Continuously monitor the compressor building for a concentration of gas in air of not more than 25 percent of the lower explosive limit; and (2) If that concentration of gas is detected, warn persons about to enter the building and persons inside the building of the danger. (c) Each gas detection and alarm system required by this section must be maintained to function properly. The maintenance must include performance tests. The gas detection and alarm equipment at Cleveland and Jasper compressor stations were not maintained nor perform properly as required. TGPL has gas detectors in three different compressor station buildings located in Cleveland area that failed to warn persons about to enter the building and persons inside the building of the danger during the field test. During the month of March 2011, the PHMSA inspector randomly selected three detectors for the field test, each located in a separate building. During the test, all three detectors were activated by applying a known concentration of gas in air to the respective sensor. An emergency shut-down alarm was acknowledged at the station control room. However, the building horn (audible alarm) and strobe lights (visual alarm) to warn persons about to enter the building and persons inside the building of the danger were found not operational. In the Jasper area, TGPL repaired a horn on the same day and strobe lights on 5/11/2011 (replaced XB4 assembly and Xb4 Xenon tube). In Cleveland area, TGPL repaired both horn and the strobe light fixtures on 5/23/2011. On September 7, 2011, a PHMSA inspector visited Jasper and Cleveland Compressor Stations and found each detector in question working properly. 7. §192.743 Pressure limiting and regulating stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in §192.739(b), the capacity must be consistent with the pressure limits of §192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. (b) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they 8#

420121005_NOPV PCP PCO_04252012_text.pdf, page 9are connected. Except as provided in §192.739(b), the capacity must be consistent with the pressure limits of §192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. TGPL failed to conduct adequate annual reviews to determine sufficient capacity of two relief devices for three years. TGPL Procedure 302, Section 2.d. states: “…..An initial capacity calculation shall be conducted for each relief valve device that protects the facility from overpressure. Subsequent to the initial capacity calculation, at intervals not exceeding 15 months, but at least once each calendar year, a review shall be conducted for that relief device to determine if new calculation is required based on changes to the device, piping configurations or operating parameters of the facility or device. ” The same procedure 302, Section 2.f. states: “If the relief device is of insufficient capacity, modifications or replacements must be made promptly to provide the required overpressure protection. ” The following two relief devices at the East Bernard Compressor Station were of insufficient capacities: Equipment Location Record Number Required Calculated Capacity Actual Relief Valve Capacity Date MLV 17-4D Disch 1000-4332 518.75 mmscf/d 498.76 mmscf/d 05/24/07 MLV 17-1D Disch 1000-4333 933.45 mmscf/d 866.91 mmscf/d 05/24/07 MLV 17-1D Disch. 1000-4333 923.96 mmscf/d 915.45 mmscf/d 06/24/09 MLV 17-4D Disch 1000-4332 516.53 mmscf/d 511.77 mmscf/d 06/24/09 MLV 17-1D Disch. 1000-4333 923.96 mmscf/d 915.45 mmscf/d 06/21/10 MLV 17-4D Disch. 1000-4332 516.53 mmscf/d 511.77 mmscf/d 06/21/10 TGPL failed to provide documentation showing that new or additional devices had been installed to provide required capacity and requested additional time for research. Based on TGPL’s e- mail response on July 1, 2011, and a follow-up meeting with TGPL representatives on September 23, 2011, the PHMSA inspector learned EPPG’s Plant Service Group provided an in- correct throughput volume to the Compliance Services Group, who is responsible for the calculation of sizing of relief valves. EPPG advised PHMSA inspectors that there are approximately 1327 regulators and 1581 overpressure protection models throughout the system. Since EPPG’s IT group had not made the necessary changes to their current computer program to calculate capacity, manual calculations for each device is time consuming and manpower is not available. During the meeting, EPPG also informed PHMSA inspectors that certain key information such as length and diameter of relief lines are difficult to obtain from the field and as a result magnitude (L/d) is assumed in order to perform sizing calculations which could lead into 9#

420121005_NOPV PCP PCO_04252012_text.pdf, page 10error. Further, EPPG stated the relief device vendor updates the co-efficient of discharge factor frequently and as a result capacities changes. In either case, a review of the records should have caused corrective action to apparent deficient capacity. TGPL failed to diligently verify necessary capacities that were found inadequate during 2007, 2009, and 2010. TGPL’s investigation to this issue was initiated after PHMSA inspector findings. 8. §192.805 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; During the inspection, TGPL failed to ensure through evaluation that an employee was qualified to perform a covered task. Specifically task 038MST: Inspect/troubleshoot/Repair Pressure Regulator (Worker Device). A TGPL employee conducted the annual breakdown inspections on August 16, 2007 and April 2, 2008, which required installation of a new Teflon seal disc kit as a part of preventive maintenance and an "O" ring kit in the pilot regulator located at company station # 9 B-Master Fuel. The PHMSA inspector reviewed the qualification records for this individual, and they indicated his qualification is not current for this covered task. The individual was last qualified on this covered task on March 17, 2004. Covered task 038MST is a Level A task which requires subsequent qualification at interval of three years not to exceed 39 months. Therefore this qualification expires on or about June 17, 2007. At the time of the inspection, TGPL failed to provide documentation indicating an employee was qualified prior to performing a covered task on August 16, 2007 and April 2, 2008. If covered task 038MST is performed by a non qualified individual, TGPL’s procedures require a span of control one to one. According to the calendar year 2007 and 2008 Regulator and Relief Valve Inspection documentation provided by TGPL, a qualified employee was not present to observe or direct this individual at the work site. During the calendar year 2009 through the time of the inspection, no parts were replaced during annual breakdown inspections. TGPL provided documentation stating that the employee is trained for the current year. 9. §192.706 Transmission Lines: Leakage surveys. Leakage surveys of a transmission line must be conducted at intervals not exceeding 15 months, but at least once each calendar year. However, in the case of a 10#

420121005_NOPV PCP PCO_04252012_text.pdf, page 11transmission line which transports gas in conformity with §192.625 without an odor or odorant, leakage surveys using leak detector equipment must be conducted– (a) In Class 3 locations, at intervals not exceeding 7½ months, but at least twice each calendar year; TGPL failed to conduct a leakage survey in a newly identified class 3 location using leak detector equipment. On May 8, 2007, TGPL indentified a structure (New Dollar General Store) near their pipeline 800-1 which prompted a MAOP/MOP Exception study. On June 12, 2007, a class location had been upgraded from a class 2 to a class 3 between Map Station 250+22 to Map Station 257+41. According to this document, TGPL is to replace an existing pipe between Map Station 250+22 to 256+12, a total of 590 feet or else revise MAOP from 936 Psig to 780 Psig by May 8, 2009. TGPL conducted leakage surveys using leak detector equipment in April and November of 2007. Although, TGPL was aware of newly identified class location upgrade in June of 2007, the company failed to include this section of pipeline for the leakage survey during November 2007. Further review revealed that this section of the pipeline was not leak surveyed until April 10, 2008. The evidence demonstrates that the operator violated § 192.706(a) by failing to conduct the leakage surveys. In the event that such surveys were, in fact, performed, the evidence demonstrates the operator violated § 192.709(c) by failing to maintain the record of a survey required by the regulations. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $118,500 as follows: Item number PENALTY 1 $11,400 2 $16,100 3 $15,700 4 $17,400 7 $42,700 8 $15,200 11#

420121005_NOPV PCP PCO_04252012_text.pdf, page 12Warning Items With respect to items 5, 6 and 9 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(s). Be advised that failure to do so may result in Tennessee Gas Pipeline Company being subject to additional enforcement action. Proposed Compliance Order With respect to item 7 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Tennessee Gas Pipeline Company. 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). 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. In your correspondence on this matter, please refer to CPF 4-2012-1005 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, R. M. Seeley Director, Southwest Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 12#

420121005_NOPV PCP PCO_04252012_text.pdf, page 13PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to El Paso Pipeline Group (EPPG) a Compliance Order incorporating the following remedial requirements to ensure the compliance of EPPG with the pipeline safety regulations: 1. In regard to Item Number 7 of the Notice pertaining to the failure to diligently verify capacities of relief devices installed on company pipeline system, EPPG must perform an audit to ensure that pressure regulators and relief devices that protect the EPPG facility from overpressure is in compliance with §192.743. The audit shall consist of: A. Develop a plan to calculate the capacities of regulators and relief valves installed on EPPG’s facility. B. Survey of overpressure protection devices that are currently installed on EPPG’s natural gas pipeline system. The survey is to evaluate overpressure protection devices installed on EPPG facilities to collect and/or verify data such as inlet and outlet size, the orifice area and coefficient of actual discharge in order to perform sizing calculations. EPPG’s D.O.T. Compliance Services Group must ensure that the highest peak throughput provided by the company’s Plant Service Group is accurate. C. Identify deficiencies observed during the review of personnel performance in preparing and following EPPG’s procedures in calculating sizing capacities. EPPG must integrate the findings and amend its procedures. D. Based upon results of plan, verify that the regulator and relief devices installed on EPPG’s facilities have adequate capacities required by 49 CFR §192.743. If the capacity is found to be insufficient, EPPG must install/modify the equipment to provide the required capacity. E. EPPG must complete Item A within 30days and Items B, C, and D within 365 days following receipt of the Final Order. Submit the results of the Proposed Compliance Order item above to Mr. R. M. Seeley, Region Director, Southwest Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, 8701 South Gessner, Suite 1110, Houston, TX 77074. 2. It is requested (not mandated) that EPPG maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to R. M. Seeley, Director, Southwest 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. 13#

420121005_Closure_04232014_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED April 23, 2014 Ms. Kim Watson President, Eastern Pipeline Group Tennessee Gas Pipeline, LLC Kinder Morgan Building 1001 Louisiana Street Houston, Texas 77002 CPF 4-2012-1005 Dear Ms. Watson: On December 21, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Tennessee Gas Pipeline, LLC (TGP) a Final Order in the above-referenced case. TGP is a subsidiary of Kinder Morgan Energy Partners, LP. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided and confirmation of payment of the civil penalty, it has been determined that you have complied with the terms of this 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, R. M. Seeley Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#