# SABINE PASS LNG, L.P. (Cheniere) — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420163002
- **title:** SABINE PASS LNG, L.P. (Cheniere) — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2016-10-17
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 191.22(c)(1).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420163002.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420163002.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420163002
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420163002
**body:**

Notice of Probable Violation involving SABINE PASS LNG, L.P. (Cheniere). PHMSA's enforcement data identifies the cited regulation as 191.22(c)(1). The case was opened on 2016-10-17 and is reported as closed as of 2017-07-11. Proposed civil penalty: $32,400. Assessed civil penalty: $32,400. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420163002_ NOPV PCP_10172016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163002/420163002_%20NOPV%20PCP_10172016_text.pdf

420163002_Final Order_06052017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163002/420163002_Final%20Order_06052017.pdf

420163002_Final Order_06052017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163002/420163002_Final%20Order_06052017_text.pdf

420163002_NOPV PCP_10172016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163002/420163002_NOPV%20PCP_10172016.pdf

420163002_Operator Response to Notice_11282016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420163002/420163002_Operator%20Response%20to%20Notice_11282016.pdf

420163002_Final Order_06052017_text.pdf

June 5, 2017
Mr. Jack A. Fusco
President and Chief Executive Officer
Cheniere Energy, Inc.
700 Milam Street
Houston, TX 77002
Re: CPF No. 4-2016-3002
Dear Mr. Fusco:
Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of
violation and assesses a civil penalty of $32,400 against Sabine Pass LNG, LP, a subsidiary of
Cheniere Energy, Inc. The penalty payment terms are set forth in the Final Order. This
enforcement action closes automatically upon receipt of payment. Service of the Final Order by
certified mail is deemed effective as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Jon Manning, Acting Director, Southwest Region, Office of Pipeline Safety, PHMSA
Mr. R. Keith Teague, Vice President, Asset Group, Sabine Pass LNG, LP
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Sabine Pass LNG, LP, ) CPF No. 4-2016-3002
a subsidiary of Cheniere Energy, Inc., )
)
Respondent. )
____________________________________)
FINAL ORDER
From June 24, 2016, to August 17, 2016, 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 Sabine Pass
LNG, LP (SPLNG or Respondent), in Louisiana. Sabine Pass LNG, LP, is a wholly-owned
subsidiary of Cheniere Energy, Inc. (Cheniere), which owns the Sabine Pass LNG Terminal.1
The Sabine Pass LNG Terminal is located on over 1,000 acres of land along the Sabine Pass
River in Cameron Parish, Louisiana, with an expected nominal production capacity of 27 million
metric tons per annum of liquefied natural gas (LNG).
2
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated October 17, 2016, a Notice of Probable Violation and Proposed Civil
Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
SPLNG had violated 49 C.F.R. § 191.22, and proposed assessing a civil penalty of $32,400 for
the alleged violation.
SPLNG responded to the Notice by letter dated November 28, 2016 (Response). The company
contested the allegation and requested that the proposed civil penalty be reconsidered.
Respondent did not request a hearing and therefore has waived its right to one.
The Notice alleged that Respondent violated 49 C.F.R. Part 191, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.22(c)(1), which states:
FINDING OF VIOLATION
1 Pipeline Safety Violation Report (Violation Report), (October 18, 2016) (on file with PHMSA), at 1.
2 Cheniere Energy, Inc., website, available at http://www.cheniere.com/terminals/sabine-pass/ (last accessed
February 8, 2017).



CPF No. 4-2016-3002
Page 2
§ 191.22 National Registry of Pipeline and LNG Operators.
(a) ….
(c) Changes. Each operator of a gas pipeline, gas pipeline facility, underground
natural gas storage facility, LNG plant, or LNG facility must notify PHMSA
electronically through the National Registry of Pipeline, Underground Natural Gas
Storage Facility, and LNG Operators at http://opsweb.phmsa.dot.gov of certain
events.
(1) An operator must notify PHMSA of any of the following events not later
than 60 days before the event occurs . . .
(iii) Construction of a new LNG plant or LNG facility . . . .
The Notice alleged that Respondent violated 49 C.F.R. § 191.22(c)(1) by failing to electronically
notify PHMSA not later than 60 days before the construction of a new LNG facility.
Specifically, the Notice alleged that on June 28, 2016, SPLNG submitted an Operator
Identification assignment request to PHMSA for LNG Train 5, which is part of Cheniere’s
Sabine Pass LNG project. The construction project described in the request included an
anticipated start date for field work activities of January 4, 2016. It was confirmed that
construction of LNG Train 5 began prior to June 28, 2016. Accordingly, SPLNG should have
submitted its notification not later than 60 days before January 4, 2016, or by November 5, 2015,
in order to provide PHMSA the requisite notice of construction of a new LNG facility.
In its Response, SPLNG argued that LNG Trains 1 through 6 are process units to the whole
plant, rather than separate facilities. SPLNG stated it provided a New Construction Notification
for the Sabine Pass Liquefaction Project on October 11, 2012, and the initial project included the
addition of four LNG Liquefaction Trains. Subsequently, an expansion of the liquefaction
facility included LNG Trains 5 and 6, both of which are within the original property boundary.
SPLNG further argued that its updated notification on June 28, 2016, was at the direction of a
PHMSA representative and was not meant to construe each LNG Train as separate and distinct
projects.
Section 191.22(c)(1)(iii) requires each operator to notify PHMSA electronically 60 days before
the construction of a new LNG facility. An LNG facility is defined in 49 C.F.R. § 193.2007 as “a
pipeline facility that is used for liquefying natural gas or synthetic gas or transferring, storing, or
vaporizing liquefied natural gas.” A pipeline facility is defined in 49 C.F.R. § 193.2007 as “new
and existing piping, rights-of-way, and any equipment, facility, or building used in the
transportation of gas or in the treatment of gas during the course of transportation.” Pursuant to
these definitions, SPLNG’s Train 5 is an LNG facility and SPLNG was required to notify
PHMSA of its construction not later than 60 days before the event. In this case, SPLNG should
have submitted its notification for Train 5 by November 5, 2015, in order to provide PHMSA the
requisite notice.
SPLNG’s Application for Authorization Under Section 3 of the Natural Gas Act, submitted to
the Federal Energy Regulatory Commission, stated LNG Trains 1 and 2 were to be part of the
Liquefaction Project Stage 1, and LNG Trains 3 and 4 were to be part of Liquefaction Project



CPF No. 4-2016-3002
Page 3
Stage 2.3 The Project Description described the LNG Trains in terms of liquefaction capacity
and as containing treatment facilities and equipment for removing solids and liquefying the
natural gas.4 SPLNG then filed an Application for Authorization Under Section 3 of the Natural
Gas Act for LNG Trains 5 and 6 in September 2013. This demonstrates that the notification of
the first project did not include LNG Train 5 within its scope, and LNG Train 5 was a separate
facility requiring an electronic notification to PHMSA.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 191.22(c)(1) by failing to electronically notify PHMSA not later than 60 days before the
construction of LNG Train 5 of Cheniere’s Sabine Pass LNG Project.
This finding of violation will be considered a prior offense 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
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 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; 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 $32,400 for the violation cited above.
Item 1: The Notice proposed a civil penalty of $32,400 for Respondent’s violation of 49 C.F.R.
§ 191.22(c)(1), for failing to electronically notify PHMSA not later than 60 days before the
construction of LNG Train 5 of Cheniere’s Sabine Pass LNG project. As discussed above,
SPLNG argued in favor of a penalty elimination or reduction because Respondent treats the LNG
Trains as units to the whole plant and not as separate facilities requiring separate construction
notifications. This argument is rejected because Respondent submitted separate notifications for
Trains 1-4 and Trains 5-6 and the notification for Train 5 was not timely under the regulation.
The gravity of the violation in this case was slight in that pipeline safety and integrity was
minimally affected by the failure to adequately notify PHMSA of the construction. However, I
find that, with respect to culpability, Respondent failed to take appropriate action to comply with
a clearly applicable requirement. Even though SPLNG stated it did not consider each LNG Train
a separate LNG facility, PHMSA’s regulations clearly define LNG facilities to include those
facilities used for liquefying natural gas just as Respondent’s LNG Trains are used.
3 Violation Report, Ex. A, FERC Submittal #20110131-5069.
4 Id., at 2.



CPF No. 4-2016-3002
Page 4
With respect to the good faith of Respondent in attempting to comply with the pipeline safety
regulations, I find that Sabine did not make a reasonable interpretation of the requirement. By
SPLNG’s own description in its FERC Application, SPLNG acknowledged the LNG Trains
perform the same function as an LNG facility and in the practical sense treated the LNG Trains
as LNG facilities with equipment and facilities used to liquefy natural gas.
Upon consideration of Respondent’s arguments, I am unconvinced that a penalty reduction is
warranted. Accordingly, having reviewed the record and considered the assessment criteria for
the Item cited above, I assess Respondent a civil penalty of $32,400 for violation of 49 C.F.R.
§ 191.22(c)(1).
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMK-325), Federal Aviation Administration,
6500 S MacArthur Blvd., Oklahoma City, Oklahoma 79169. The Financial Operations Division
telephone number is (405) 954-8845.
Failure to pay the $32,400 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.
Under 49 C.F.R. § 190.243, Respondent has the right to submit a Petition for Reconsideration of
this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline
Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC
20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA
will accept petitions received no later than 20 days after receipt of the Final Order by the
Respondent, provided they contain a brief statement of the issue(s) and meet all other
requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of
any civil penalty assessed but does not stay any other provisions of the Final Order, including
any required corrective actions. If Respondent submits payment of the civil penalty, the Final
Order becomes the final administrative decision and the right to petition for reconsideration is
waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
June 5, 2017
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

420163002_ NOPV PCP_10172016_text.pdf

NOTICE OF PROBABLE VIOLATION
and
PROPOSED CIVIL PENALTY
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
October 17, 2016
Mr. R. Keith Teague
Sabine Pass LNG, L.P.
700 Milam Street
Houston, TX 77002
CPF 4-2016-3002
Dear Mr. Teague:
From June 24, 2016 to August 17, 2016, representatives of the Pipeline and Hazardous Materials
Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49
United States Code inspected your late submittal of an operator registry notification by Sabine
Pass LNG, L.P., a wholly owned subsidiary of Cheniere Energy.
As a result of the late submittal, it appears that you have committed a probable violation of the
Pipeline Safety Regulations, Title 49, and Code of Federal Regulations. The items inspected and
the probable violation is:



1. §191.22 National Registry of Pipeline and LNG operators.
(c) Changes. Each operator of a gas pipeline, gas pipeline facility, LNG plant or
LNG facility must notify PHMSA electronically through the National Registry of
Pipeline and LNG Operators at http://opsweb.phmsa.dot.gov, of certain events.
(1) An operator must notify PHMSA of any of the following events not later than 60
days before the event occurs:
(i) Construction or any planned rehabilitation, replacement, modification, upgrade,
uprate, or update of a facility, other than a section of line pipe that costs $10 million
or more. If 60 day notice is not feasible because of an emergency, an operator must
notify PHMSA as soon as practicable;
(ii) Construction of 10 or more miles of a new pipeline; or
(iii) Construction of a new LNG plant or LNG facility.
Sabine Pass LNG failed to provide adequate notification for the construction of Train 5 which is
a part of Cheniere’s Sabine Pass LNG project as required by 49 CFR §191.21(c)(1). On June 28,
2016, Sabine Pass LNG submitted an OPID assignment request to PHMSA (J-20160628-11783).
The construction project described in this submittal had an anticipated start date of field work
activities on January 4, 2016 which was before the notification date. Sabine Pass LNG’s
representative and Cheniere’s website confirmed that construction began prior to the date of
operator registry notification. The notification should have been submitted no later than
November 5, 2015 in order to provide PHMSA the required 60 day notice prior to construction
as required by §191.21(c)(1). As a result, Sabine Pass LNG notified PHMSA 236 days late.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $205,638
per violation per day the violation persists up to a maximum of $2,056,380 for a related series of
violations. For violations occurring between January 4, 2012 to August 1, 2016, the maximum
penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed
$2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012,
the maximum penalty may not exceed $100,000 per violation per day, with maximum penalty
not to exceed $1,000,000 for related series of violations. Also, for LNG facilities, an additional
penalty of not more than $75,123 for each violation may be imposed. The Compliance Officer
has reviewed the circumstances and supporting documentation involved in the above probable
violation and has recommended that you be preliminarily assessed a civil penalty of $32,400.
2



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. All
material submit in response to this enforcement action may be 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 4-2016-3002 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
Enclosure: Response Options for Pipeline Operators in Compliance Proceedings
3
- **truncated:** false
- **body characters:** 18526