NATURAL GAS PIPELINE CO OF AMERICA (KMI) — Notice of Probable Violation

party submissionOfficial PDF420121018_Operator_Response__11282012.pdf#

420121018_Closure_11212013_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED November 21, 2013 Mr. M. Dwayne Burton Vice President Gas Pipeline Operations Natural Gas Pipeline Company of America 500 Dallas, Suite 1000 Houston, TX 77002 CPF 4-2012-1018 Dear Mr. Burton: On February 28, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Natural Gas Pipeline Company of America LLC a Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided June 7, October 10 and November 11, 13, 2013 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#

420121018_NOPV PCP PCO_10242012_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED October 24, 2012 Mr. M. Dwayne Burton Vice President, Gas Pipeline Operations Natural Gas Pipeline Company of America 500 Dallas, Suite 1000 Houston, TX 77002 CPF 4-2012-1018 Dear Mr. Burton: On multiple occasions between January 20, 2011 and August 9, 2012, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code were onsite and inspected Natural Gas Pipeline Company of America’s (NGPL) Gulf Coast pipelines from South Texas to the Chicago Metro area. 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. §192.479 Atmospheric Corrosion Control; General (a) Each operator must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipelines under paragraph (c) of this section. During the field inspection of the Robstown area, a PHMSA inspector observed that NGPL failed to clean and coat portions of their pipeline exposed to the atmosphere at several locations#

420121018_NOPV PCP PCO_10242012_text.pdf, page 2within the Robstown Compressor Station 341. The PHMSA inspector observed disbonded coating, atmospheric corrosion, and severe pitting at flanged areas. 2. §192.481 Atmospheric Corrosion Control: Monitoring. (b) During inspections the operator must give particular attention to pipe at soil-to- air interfaces, under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at deck penetrations, and in spans over water. NGPL did not adequately inspect pipe located at a pipe support for atmospheric corrosion. During the Wharton Compressor Station 301 field inspection, a PHMSA inspector observed that NGPL had not thoroughly inspected for corrosion of pipe at pipe supports. NGPL field personnel are not able to perform an atmospheric evaluation of the pipe condition underneath concrete pipe supports. At the present time, NGPL is inspecting for atmospheric corrosion by observing the rust stains that may be forming at the edges of the concrete supports. A more effective means of monitoring for atmospheric corrosion must be implemented. NGPL has failed to meet the requirements of §192.481 by failing to adequately inspect for atmospheric corrosion at pipe supports. 3. §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 one 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. NGPL did not follow their procedures for continuing surveillance reviews. While reviewing records for District 201 and 311 a PHMSA inspector noted that NGPL did not document any continuing surveillance reviews prior to the 2011 calendar year. Also, while reviewing records for District 307 it was discovered that for the calendar years 2009, 2010, and 2011 the Technical Services Manager had not signed off as an evaluator of the district’s continuing surveillance review. O&M Procedure 218, Continuing Surveillance section 3 states “annually, not to exceed 15 months the Operations Manager shall meet with subject matter experts as required to review inspection records and documents that comprise continuing surveillance. Continuing surveillance shall be conducted to identify any pipeline facilities experiencing unusual operating and maintenance conditions.” 2#

420121018_NOPV PCP PCO_10242012_text.pdf, page 3Section 5 continues and states: “Document each review of the District's continuing surveillance program in accordance with O&M Procedure 1700 - Inspection and Maintenance: I&M Procedure 1-0203.00 – Continuing Surveillance.” I&M Procedure 1-0203.00- Continuing Surveillance with a revision date of 2005-07-01 states “Evaluate the District’s continuing surveillance program with Operations management and Technical Services Manager. Modify the program as required for each district following the guidelines contained in O&M Procedure 218.” 4. §192.611 Change in class location: Confirmation or revision of maximum allowable operating pressure. (d) Confirmation or revision of the maximum allowable operating pressure that is required as a result of a study under §192.609 must be completed within 24 months of the change in class location. Pressure reduction under paragraph (a) (1) or (2) of this section within the 24-month period does not preclude establishing a maximum allowable operating pressure under paragraph (a)(3) of this section at a later date. NGPL did not revise their maximum allowable operating pressure (MAOP) within 24 months of a change in class location. While reviewing records for District 307 a PHMSA inspector observed that NGPL had a class location change from Class 1 and 2 to Class 3 on April 27, 2009. It was observed that sections of this class location change’s MAOP could not be confirmed and that a MAOP revision would be required. An MAOP revision was not completed until January 25, 2012 and exceeded the 24-month period by 9 months. 5. §192.615 Emergency plans. (b) Each operator shall: (3) Review employee activities to determine whether the procedures were effectively followed in each emergency. NGPL did not perform a review of employee activities to determine whether the procedures were effectively followed during an emergency. While reviewing records for District 309 a PHMSA inspector noted that NGPL completed Form 100-45 following an incident that occurred at Compressor Station 309 on March 6, 2006 involving a stuck relief valve. From the review of the form, PHMSA could not determine that NGPL performed the required review of activities and procedures. More detail in the documentation is necessary in order to demonstrate that such reviews are performed as required by the regulations. 3#

420121018_NOPV PCP PCO_10242012_text.pdf, page 46. §192.807 Recordkeeping. Each operator shall maintain records that demonstrate compliance with this subpart. (a) Qualification records shall include: (1) Identification of qualified individual(s); (2) Identification of the covered tasks the individual is qualified to perform; (3) Date(s) of current qualification; and (4) Qualification method(s). (b) Records supporting an individual’s current qualification shall be maintained while the individual is performing the covered task. Records of prior qualification and records of individuals no longer performing covered tasks shall be retained for a period of five years. NGPL did not maintain operator qualification records for one of its contract welders. While reviewing operator qualification records at District 309 a PHMSA inspector requested qualification records for a contract welder that had performed covered tasks during a 2008 launcher/receiver upgrade project. NGPL did not make the records available during the inspection. The covered tasks required were Abnormal Operations (001.01.01), Welding Process (024.01.01) and Visual Inspection of Welds (024.02.01). 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 violations and has recommended that you be preliminarily assessed a civil penalty of $122,700 as follows: Item number PENALTY 3 $60,300 4 $41,200 6 $21,200 Warning Items With respect to item 5, 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 NGPL being subject to additional enforcement action. 4#

420121018_NOPV PCP PCO_10242012_text.pdf, page 5Proposed Compliance Order With respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to NGPL. 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 4-2012-1018 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 5#

420121018_NOPV PCP PCO_10242012_text.pdf, page 6PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Natural Gas Pipeline Company of America (NGPL) a Compliance Order incorporating the following remedial requirements to ensure the compliance of NGPL with the pipeline safety regulations: 1. 2. 3. 4. In regard to Item Number 1 of the Notice pertaining to coating failure and onset of atmospheric corrosion, NGPL must evaluate the piping surface to ensure that pipe integrity is suitable for the maximum allowable operating pressure of the pipeline at the Robstown Compressor Station. The areas must then be cleaned and coated according to 49 CFR Part 192 and NGPL procedures. In regard to Item Number 2 of the Notice pertaining to inspection for atmospheric corrosion at pipe supports at the Wharton Compressor Station, NGPL must thoroughly evaluate their pipelines at concrete pipe supports and determine if atmospheric corrosion is present. If atmospheric corrosion is present, NGPL must evaluate the piping surface to ensure that pipe integrity is suitable for the maximum allowable operating pressure of the pipeline and clean and coat the affected areas according to 49 CFR and NGPL procedures. NGPL should complete items 1 and 2 within 90 days of receipt of the Final Order. It is requested (not mandated) that NGPL 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. 6#

420121018_Final Order_02282013_text.pdf, page 1Official PDFFEBRUARY 28, 2013 Mr. David Devine President Natural Gas Pipeline Company of America, LLC 500 Dallas Street, STE 1000 Houston, TX 77002 Re: CPF No. 4-2012-1018 Dear Mr. Devine: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $122,700, and specifies actions that need to be taken by Natural Gas Pipeline Company of America, LLC, to comply with the pipeline safety regulations. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated November 29, 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. Rodrick M. Seeley, Director, Southwest Region, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS Mr. M. Dwayne Burton, Vice President, Gas Pipeline Operations, Natural Gas Pipeline Company of America, LLC CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420121018_Final Order_02282013_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 ) Natural Gas Pipeline Company of America, LLC,) ) ) ) Respondent. ) __________________________________________) CPF No. 4-2012-1018 FINAL ORDER Between January 11, 2011, and August 9, 2012, 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 National Gas Pipeline Company of America, LLC (NGPL or Respondent),1 from South Texas to the Chicago metropolitan area. NGPL operates approximately 9,800 miles of natural gas pipelines that transport natural gas from production areas in Texas, New Mexico, Oklahoma and Louisiana to the Chicago area. As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to NGPL, by letter dated October 3, 2012, a Notice of Probable Violation, Proposed Civil Penalty, Proposed Compliance Order (Notice), and a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that NGPL had committed various violations of 49 C.F.R. Part 192 and assessing a civil penalty of $122,700 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. The warning item required no further action but warned the operator to correct the probable violation or face future potential enforcement action. NGPL responded to the Notice by letter dated November 28, 2012 (Response). The company did not contest the allegations of violation and paid the proposed civil penalty of $122,700, as provided in 49 C.F.R. § 190.227. Payment of the penalty authorizes PHMSA to make findings of violation as to those items. The findings are made with prejudice to Respondent. 1 NGPL is jointly owned by Myria Holdings Inc., (80%), and Kinder Morgan Kansas, Inc. (20%). Kinder Morgan is the operator of the pipeline pursuant to an operations and reimbursement agreement between the owners.#

420121018_Final Order_02282013_text.pdf, page 32 FINDINGS OF VIOLATIONS In its Response, NGPL did not contest the allegations in the Notice that it violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.479(a), which states: § 192.479 Atmospheric corrosion control: General. (a) Each operator must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipelines under paragraph (c) of this section. The Notice alleged that NGPL violated 49 C.F.R. § 192.479(a) by failing to clean and coat each pipeline or portion of its pipeline that is exposed to the atmosphere. Specifically, the Notice alleged that NGPL failed to properly clean and coat portions of its pipeline within the Robstown Compressor Station 341. The OPS inspector observed disbonded coating, atmospheric corrosion, and severe pitting at flanged areas. NGPL 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. § 192.479(a) for failing to properly clean and coat each pipeline or portion of its pipeline exposed to the atmosphere. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.481, which states, in relevant part: § 192.481 Atmospheric corrosion control: Monitoring. (a) Each operator must inspect each pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion… (b) During inspections the operator must give particular attention to pipe at soil-to-air interfaces, under thermal insulation, under disbanded coatings, at pipe supports, in splash zones, at deck penetrations, and in spans over water. . . . The Notice alleged that NGPL violated 49 C.F.R. § 192.481 by failing to give particular attention to pipe at pipe supports during atmospheric corrosion inspections. Specifically, the Notice alleged that NGPL failed to properly inspect for atmospheric corrosion at the Wharton Compressor Station 301, since company personnel were physically unable to perform a thorough evaluation of pipe conditions underneath certain concrete pipe supports. NGPL did not contest the proposed penalty for this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.481 by failing to give particular attention to pipe at pipe supports during inspections for atmospheric corrosion. Item 3: The Notice alleged that Respondent violated 49 C.F.R. §192.605(a), which states, in relevant part:#

420121018_Final Order_02282013_text.pdf, page 43 § 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 one each calendar year. . . The Notice alleged that NGPL violated 49 C.F.R. § 192.605(a) by failing to follow its own manual of written procedures for conducting operations and maintenance activities. Specifically, the Notice alleged that NGPL failed to document any continuing surveillance reviews conducted prior to January 2011 in District 201 and 311, in violation of its own Operations & Maintenance (O&M) Procedure 218, Continuing Surveillance, Section 5. Additionally, the company was unable to show that its continuing surveillance program had been properly reviewed by NGPL’s Technical Services Manager for calendar years 2009, 2010, and 2011, as required by Section 3 of the same procedure. NGPL did not contest the proposed penalty for 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 conducting operations and maintenance activities. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.611(d), which states: § 192.611 Change in class location: Confirmation or revision of maximum allowable operating pressure. (a) … (d) Confirmation or revision of the maximum allowable operating pressure that is required as a result of a study under §192.609 must be completed within 24 months of the change in class location. Pressure reduction under paragraph (a)(1) or (2) of this section within the 24-month period does not preclude establishing a maximum allowable operating pressure under paragraph (a)(3) of this section at a later date. The Notice alleged that NGPL violated 49 C.F.R. § 192.611(d) by failing to properly confirm or revise the maximum allowable operating pressure (MAOP) for a particular pipeline segment within 24 months of a change in the class location of such segment. 2 Specifically, the Notice alleged that on April 27, 2009, NGPL changed the class location of a certain segment of pipeline from Class 1 and 2 to Class 3. The Notice alleged that the OPS inspector was unable to determine whether NGPL had properly confirmed or revised the MAOP for this segment of pipeline. According to the Notice, the revision in MAOP was not completed until 2 Under 49 C.F.R. § 192.609, whenever the population density of the area surrounding a continuous one-mile segment of pipeline increases beyond certain density levels set forth in § 192.5, an operator must determine whether additional safeguards should be taken to ensure public safety.#

420121018_Final Order_02282013_text.pdf, page 54 January 25, 2012, exceeding the 24-month deadline by nine months. NGPL did not contest the proposed penalty for this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.611(d) by failing to properly revise the MAOP within 24 months of a change in the class location of a particular pipeline segment. Item 6: The Notice alleged that Respondent violated 49 C.F.R. § 192.807, which states: § 192.807 Recordkeeping. Each operator shall maintain records that demonstrate compliance with this subpart. (a) Qualification records shall include: (1) Identification of qualified individual(s); (2) Identification of the covered tasks the individual is qualified to perform; (3) Date(s) of current qualification; and (4) Qualification method(s). (b) Records supporting an individual's current qualification shall be maintained while the individual is performing the covered task. Records of prior qualification and records of individuals no longer performing covered tasks shall be retained for a period of five years. The Notice alleged that NGPL violated 49 C.F.R. § 192.807 by failing to maintain certain records demonstrating compliance with Subpart N (Qualification of Pipeline Personnel) of Part 192. Specifically, it alleged that NGPL failed to maintain proper records under its operator qualification (OQ) program for a particular contract welder. While reviewing OQ records at the company’s District 309 offices, an OPS inspector requested the qualification records for a particular contract welder who had performed certain “covered tasks” 3 during a 2008 launcher/receiver upgrade project. NGPL was unable to produce the records during the inspection. NGPL did not contest the proposed penalty for this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.807 by failing to properly maintain OQ records for a particular contract welder. 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 3 The covered tasks were Abnormal Operations (001.01.01), Welding Process (024.01.01) and Visual Inspection of Welds (024.02.01).#

420121018_Final Order_02282013_text.pdf, page 65 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; 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 $122,700 for the violations cited above. Item 3: The Notice proposed a civil penalty of $60,300 for Respondent’s violation of 49 C.F.R. § 192.605(a), for failing to follow NGPL’s own manual of written procedures for conducting operations and maintenance activities. NGPL paid the proposed penalty, which authorizes PHMSA to make a finding of violation, with prejudice, regarding this item. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $60,300 for violation of 49 C.F.R. § 192.605(a). Item 4: The Notice proposed a civil penalty of $41,200 for Respondent’s violation of 49 C.F.R. § 192.611, for failing to revise the MAOP of a particular pipeline segment within 24 months of a change in the segment’s class location. NGPL paid the proposed penalty, which authorizes PHMSA to make a finding of violation, with prejudice, regarding this item. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $41,200 for violation of 49 C.F.R. § 192.611. Item 6: The Notice proposed a civil penalty of $21,200 for Respondent’s violation of 49 C.F.R. § 192.807, for failing to retain OQ records for a certain contract welder who had performed covered tasks during a 2008 launcher/receiver upgrade project. NGPL paid the proposed penalty, which authorizes PHMSA to make a finding of violation, with prejudice, regarding this item. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $21,200 for violation of 49 C.F.R. § 192.807. In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $122,700, which has been paid in full by NGPL. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1 and 2 for violations of 49 C.F.R. §§ 192.479(a) and 192.481, respectively. 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 4 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat. 1904, January 3, 2012, increased the maximum civil penalty liability for violating a pipeline safety standard to $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for a related series of violations.#

420121018_Final Order_02282013_text.pdf, page 76 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 § 192.479(a) (Item 1), NGPL must evaluate the piping surface to ensure that pipe integrity is suitable for the MAOP of the pipeline at the Robstown Compressor Station. The areas must then be cleaned and coated according to 49 CFR Part 192 and NGPL procedures. 2. With respect to the violation of § 192.481 (Item 2), NGPL must thoroughly evaluate its pipelines at concrete pipe supports and determine if atmospheric corrosion is present. If atmospheric corrosion is present, NGPL must evaluate the piping surface to ensure that pipe integrity is suitable for the MAOP of the pipeline and clean and coat the affected areas according to 49 CFR and NGPL procedures. 3. Respondent must complete Items 1 and 2 within 90 days of receipt of the Final Order. 4. It is requested (not mandated) that Respondent 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. 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 ITEM With respect to Item 5, the Notice alleged a probable violation of Part 192 but did not propose a civil penalty or compliance order for this item. Therefore, this is considered to be a warning item. The warning was for: 49 C.F.R. § 192.615(b)(3) (Item 5) ─ Respondent’s alleged failure to review employee activities to determine if the employees were properly following the company’s procedures during an emergency. If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject#

420121018_Final Order_02282013_text.pdf, page 87 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#