{"operation":"document","citation":"CPF 420163001","title":"CORPUS CHRISTI LIQUEFACTION, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-08-05","effective_on":null,"summary":"CLOSED notice of probable violation citing 191.22(a), 191.22(c)(1)(iii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420163001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420163001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420163001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420163001","body":"Notice of Probable Violation involving CORPUS CHRISTI LIQUEFACTION, LLC. PHMSA's enforcement data identifies the cited regulations as 191.22(a),  191.22(c)(1)(iii). The case was opened on 2016-08-05 and is reported as closed as of 2017-07-11. Proposed civil penalty: $46,000. Assessed civil penalty: $46,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420163001_Final Order_06052017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163001/420163001_Final%20Order_06052017.pdf\n\n420163001_Final Order_06052017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163001/420163001_Final%20Order_06052017_text.pdf\n\n420163001_NOPV PCP_08052016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163001/420163001_NOPV%20PCP_08052016.pdf\n\n420163001_NOPV PCP_08052016_TEXT.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163001/420163001_NOPV%20PCP_08052016_TEXT.pdf\n\n420163001_Operator Response to Notice_09072016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163001/420163001_Operator%20Response%20to%20Notice_09072016.pdf\n\n420163001_Final Order_06052017_text.pdf\n\nJune 5, 2017\nMr. Jack A. Fusco\nPresident and CEO\nCheniere Energy, Inc.\n700 Milam Street, Suite 1900\nHouston, Texas 77002\nRe: CPF No. 4-2016-3001\nDear Mr. Fusco:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $46,000. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Jon Manning, Acting Director, Southwest Region, OPS\nMr. Douglas D. Shanda, Senior Vice President, Terminal Operations, Cheniere Energy,\nInc., 700 Milam Street, Suite 1900, Houston, Texas 77002\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\n)\n)\nCorpus Christi Liquefaction, LLC, )\na subsidiary of Cheniere Energy, Inc., )\nRespondent. )\n____________________________________)\n) CPF No. 4-2016-3001\nFINAL ORDER\nFrom June 24 - July 6, 2016, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted a pipeline safety inspection of the records of Corpus Christi Liquefaction, LLC (CCL\nor Respondent), a wholly-owned subsidiary of Cheniere Energy, Inc. CCL is constructing a\nliquefied natural gas (LNG) export terminal located on the La Quinta Channel on the northeast\nside of Corpus Christi Bay in San Patricio County, Texas.1\nAs a result of the records inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated August 5, 2016, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that CCL\ncommitted various violations of 49 C.F.R. Part 191 and proposed assessing a civil penalty of\n$46,000 for the alleged violations. CCL responded to the Notice by letter dated September 7,\n2016 (Response). The company provided an explanation of its actions and requested that the\nproposed civil penalty amount be reconsidered. Respondent did not request a hearing and\ntherefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 191, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.22(a), which states, in\nrelevant part:\n1 Cheniere Energy, Inc.’s website, available at http://www.cheniere.com/terminals/corpus-christi-project/ (last\naccessed December 12, 2016).\n\n\n\nCPF No. 4-2016-3001\nPage 2\n§ 191.22 National Registry of Pipeline and LNG Operators.\n(a) OPID Request. Effective January 1, 2012, each operator of a gas\npipeline, gas pipeline facility, LNG plant or LNG facility must obtain\nfrom PHMSA an Operator Identification Number (OPID). An OPID is\nassigned to an operator for the pipeline or pipeline system for which the\noperator has primary responsibility. To obtain an OPID, an operator must\ncomplete an OPID Assignment Request DOT Form PHMSA F 1000.1\nthrough the National Registry of Pipeline and LNG Operators in\naccordance with § 191.7.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.22(a) by failing to obtain from\nPHMSA an OPID. Specifically, the Notice alleged that CCL failed to request an OPID from\nPHMSA prior to beginning construction of its LNG facility. Although construction was set to\nbegin on June 1, 2015, CCL did not request an OPID from PHMSA until June 27, 2016, more\nthan one year after the anticipated start date of the construction project.\nIn its Response, CCL stated that it did not qualify as an operator because its LNG facility was\nstill under construction at the time of the alleged violation. Therefore, it did not need to apply\nfor an OPID under 49 C.F.R. § 191.22(a). For administrative ease, however, it submitted an\nOPID assignment request on June 27, 2016.\nSection 191.22(a) requires “each operator of a gas pipeline, gas pipeline facility, LNG plant or\nLNG facility” to obtain an OPID from PHMSA. One of the purposes of an OPID is to enable an\noperator to file reports with PHMSA. For example, § 191.22(c) requires operators to notify\nPHMSA before construction of LNG facilities commences.2 Thus, it is clear that the federal\npipeline safety regulations apply to entities, like Respondent, who are engaged in the\nconstruction of LNG facilities. The fact that liquefied natural gas has not started flowing is not\ndeterminative of their application. By engaging in the construction and design of its LNG\nfacility, CCL qualified as an operator under Part 191 and needed to apply for an OPID under 49\nC.F.R. § 191.22(a) in order to report the construction to PHMSA.\nAccordingly, after considering all of the evidence, I find that CCL violated 49 C.F.R. § 191.22(a)\nby failing to obtain an OPID from PHMSA. This finding of violation will be considered a prior\noffense in any subsequent enforcement action taken against Respondent.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 191.22(c)(1)(iii), which states:\n§ 191.22 National Registry of Pipeline and LNG Operators.\n(a) . . .\n(c) Changes. Each operator of a gas pipeline, gas pipeline facility,\nLNG plant or LNG facility must notify PHMSA electronically through the\nNational Registry of Pipeline and LNG Operators at\nhttp://opsweb.phmsa.dot.gov of certain events.\n2 See 49 C.F.R. Part 193 providing design and construction requirements for LNG facilities.\n\n\n\nCPF No. 4-2016-3001\nPage 3\n(1) An operator must notify PHMSA of any of the following events\nnot later than 60 days before the event occurs:\n(i) . . .\n(iii) Construction of a new LNG plant or LNG facility.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.22(c)(1)(iii) by failing to notify\nPHMSA electronically thorough the National Registry of Pipeline and LNG Operators of the\nconstruction of a new LNG facility no later than 60 days before construction began.\nSpecifically, the Notice alleged that CCL began construction of its LNG facility on May 13,\n2015, but did not notify PHMSA of the construction until June 27, 2016, well beyond the\nrequirement to report 60 days prior to beginning construction, as set forth in 49 C.F.R.\n§ 191.22(c)(1)(iii).\nIn its Response, CCL stated that it began work on its LNG facility construction project on June\n1, 2015, the date construction activities commenced. It did not begin construction on May 13,\n2015, which was the commercial notice date. Even if construction began on June 1, 2015,\nhowever, I find that CCL needed to report to PHMSA no later than April 2, 2015. CCL,\nhowever, did not report the construction of its new LNG facility until June 27, 2016, well beyond\nthe 60-day limit.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 191.22(c)(1)(iii) by failing to notify PHMSA of the construction of a new LNG facility no later\nthan 60 days before construction began. This finding of violation will be considered a prior\noffense in any subsequent enforcement action taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $46,000 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $23,000 for Respondent’s violation of 49 C.F.R.\n§ 191.22(a) for failing to obtain an OPID. CCL was required to obtain an OPID from PHMSA to\nreport the construction of its LNG facility, but failed to do so. Although its actions minimally\naffected pipeline safety or integrity, Respondent failed to take appropriate action to comply with\na requirement that was clearly applicable for more than one year. Accordingly, having reviewed\n\n\n\nCPF No. 4-2016-3001\nPage 4\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $23,000\nfor violation of 49 C.F.R. § 191.22(a).\nItem 2: The Notice proposed a civil penalty of $23,000 for Respondent’s violation of 49 C.F.R.\n§ 191.22(c)(1)(iii) for failing to timely notify PHMSA of the construction of its LNG facility.\nCCL was required to report the construction of the new LNG facility to PHMSA no later than 60\ndays from the construction start date. However, PHMSA was not notified of the LNG\nconstruction project until approximately one year after construction began, far exceeding the 60-\nday requirement set forth in 49 C.F.R. § 191.22(c)(1)(iii). The proposed penalty took into\naccount that Respondent failed for more than one year to take appropriate action to comply with\na requirement that was clearly applicable. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $23,000 for violation of\n49 C.F.R. § 191.22(c)(1)(iii).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $46,000.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S. MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $46,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\n\n\n\nCPF No. 4-2016-3001\nPage 5\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJune 5, 2017\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":13597}