{"operation":"document","citation":"CPF 420125030W","title":"MAGELLAN TERMINALS HOLDINGS, LP — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-09-13","effective_on":null,"summary":"CLOSED warning letter citing 195.404(a), 195.430(a), 195.432, 195.573.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420125030w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420125030w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420125030w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420125030W","body":"Warning Letter involving MAGELLAN TERMINALS HOLDINGS, LP. PHMSA's enforcement data identifies the cited regulations as 195.404(a),  195.430(a),  195.432,  195.573. The case was opened on 2012-09-13 and is reported as closed as of 2012-09-13. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420125030W_Warning_09132012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420125030W/420125030W_Warning_09132012.pdf\n\n420125030W_Warning_09132012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420125030W/420125030W_Warning_09132012_text.pdf\n\n420125030W_Warning_09132012_text.pdf\n\nWARNING LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nSeptember 13, 2012\nMr. Michael Pearson\nVice President, Technical Services\nMagellan Terminals Holdings, LP\nOne Williams Center, MD 27\nTulsa, OK 74172\nCPF 4-2012-5030W\nDear Mr. Pearson:\nOn various dates in 2011, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected the\nMagellan Terminals Holdings, LLC (Magellan, the Operator) Cushing Terminal in Cushing, OK\nand Drumright breakout tank facility in Drumright, OK.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violation(s) are:\n1. §195.404 Maps and Records.\n(a) Each operator shall maintain current maps and records of its pipeline systems that include at\nleast the following information;\n(1) Location and identification of the following pipeline facilities;\n(i) Breakout tanks;\n(ii) Pump stations;\n(iii) Scraper and sphere facilities;\n(iv) Pipeline valves;\n(v) Facilities to which §195.402(c)(9) applies;\n(vi) Rights-of-way; and\n\n\n\n(vii)Safety devices to which §195.428 applies.\n(2) All crossings of public roads, railroads, rivers, buried utilities, and foreign pipelines.\n(3) The maximum operating pressure of each pipeline.\n(4) The diameter, grade, type, and nominal wall thickness of all pipe.\nMagellan did not have complete records documenting all of the Cushing Terminal and\nDrumright breakout facility piping, specifically the grades and wall thicknesses of each pipe. At\nthe time of the inspection, the Operator had initiated a project to measure and document the pipe\nwall thicknesses and confirm the internal design pressure by using the yield strength specified in\n§195.106(b)(2), or perform tensile testing as specified in §195.106(b)(1).\n2. §195.430 Firefighting equipment.\nEach operator shall maintain adequate firefighting equipment at each pump station and\nbreakout tank area. The equipment must be-\n(a) In proper operating condition at all times;\n(b) Plainly marked so that its identity as firefighting equipment is clear; and,\n(c) Located so that it is easily accessible during a fire.\n§195.10 Responsibility of operator for compliance with this part.\nAn operator may make arrangements with another person for the performance of any\naction required by this part. However, the operator is not thereby relieved from the\nresponsibility for compliance with any requirement of this part.\nMagellan did not maintain adequate firefighting equipment at each pump station and breakout\ntank area. The Operator has only fire extinguishers at most pump stations and breakout tank\nareas. The Magellan Portable Fire Extinguishers Administrative Procedure, 5.05-ADM-076\nstates “This equipment shall be adequate to extinguish fires that are in the early stages of\ndevelopment and in no case shall be expected to fight a fully engulfed fire.” The Operator relies\non public firefighting agencies and a cooperative organization known as the Safety Alliance of\nCushing (SAC) to assist with equipment and supplies to respond to a fire at their pump stations\nand breakout tank facilities. While the Operator may make arrangements with another “person”\nfor the performance of these requirements, the Operator is not relieved of the responsibility for\ncompliance. The Operator’s liaison documentation is not adequate to show that Magellan has\nconfirmed that the agencies being relied on have adequate training, equipment, and supplies to\nrespond to fires at their pump stations and breakout tank areas.\n3. §195.432 Inspection of in-service breakout tanks.\n(a) Except for breakout tanks inspected under paragraphs (b) and (c) of this section,\neach operator shall, at intervals not exceeding 15 months, but at least once each calendar\nyear, inspect each in-service breakout tank.\n(b) Each operator must inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653 (incorporated\nby reference, see § 195.3). However, if structural conditions prevent access to the tank\n2\n\n\n\nbottom, the bottom integrity may be assessed according to a plan included in the\noperations and maintenance manual under § 195.402(c)(3).\n(d) The intervals of inspection specified by documents referenced in paragraphs (b) and\n(c) of this section begin on May 3, 1999, or on the operator's last recorded date of the\ninspection, whichever is earlier.\nMagellan did not remedy a structural pipe support issue that should have been identified from the\nrequired breakout tank inspections and did not properly establish the internal inspection interval\nfor at least one breakout tank in the Cushing Terminal. Pipe supports were found to be\nstructurally compromised and could result in additional stresses on the breakout tank that were\nnot accounted for in the design. Also, the internal inspection interval on tank 5003 had not been\ncorrectly established based on the Operator’s procedures.\nPHMSA questioned the internal inspection interval of 30 years established by the Operator for\nthis tank. Magellan uses a risk-based methodology allowed by API Standard 653 to establish the\ninternal inspection interval but this requires the Operator to consider the methods and accuracy\nused to determine the corrosion rates. The internal inspection report indicated that the contractor\nwas not able to perform ultrasonic edge scrubs to determine the remaining floor thickness due to\nthe internal coating. These edge scrub measurements would have been in the Critical Zone of\nthe tank which is defined in API Standard 653 as “The portion of the tank bottom or annular\nplate within 3 in. of the inside edge of the shell, measured radially inward.” This is the area of\nthe tank that is subjected to the highest stresses due to the shell to floor joint. Integrity issues in\nthe Critical Zone could result in structural failure of the tank and consequently there are\nadditional API Standard 653 requirements for the Critical Zone, including floor thickness\nrequirements.\nMagellan responded that additional measurements had been taken in the Critical Zone on this\ntank at a later date and the plates were found to be within acceptable limits. However, the\nquestions prompted Magellan to review their data for this tank and the Operator determined that\nthe repair threshold for this tank had not been correctly entered into their database. This change\nresulted in a reduction of the internal inspection interval from 30 years to 16 years and also\nprompted Magellan to review the repair threshold data and internal inspection intervals for other\ntanks.\n4. §195.573 What must I do to monitor external corrosion control?\n(c) Rectifiers and other devices. You must electrically check for proper performance\neach device in the first column at the frequency stated in the second column.\nDevice Check frequency\nRectifier.................................At least six times each calendar year, but with intervals not\nexceeding 2 ½ months\n3\n\n\n\nReverse current switch, Diode\nInterference bond whose failure would jeopardize structural protection\nOther interference bond ........At least once each calendar year, but with intervals not\nexceeding 15 months.\n(d) Breakout tanks. You must inspect each cathodic protection system used to control\ncorrosion on the bottom of an aboveground breakout tank to ensure that operation and\nmaintenance of the system are in accordance with API Recommended Practice 651.\nHowever, this inspection is not required if you note in the corrosion control procedures\nestablished under Sec. 195.402(c)(3) why compliance with all or certain operation and\nmaintenance provisions of API Recommended Practice 651 is not necessary for the\nsafety of the tank.\nThe Operator did not meet at least one of the cathodic protection criteria for breakout tanks\nspecified by API RP 651 for some of the tanks located in the Magellan Shinn Pence tank farm as\nwell as some piping and tanks at the Cushing Terminal facility. Also, Magellan did not detect a\nrectifier (Rectifier 873R) with reversed connections for nearly a year after acquiring the assets.\nMagellan corrected the rectifier connections in August 2011 and committed to performing\nintegrity assessments of the affected piping and breakout tank.\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000\nfor each violation for each day the violation persists up to a maximum of $1,000,000 for any\nrelated series of violations. We have reviewed the circumstances and supporting documents\ninvolved in this case, and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to correct the item(s) identified in this letter.\nFailure to do so will result in Magellan being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 4-2012-5030W. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe\nthe redacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n4","truncated":false,"body_characters":10352}