{"operation":"document","citation":"CPF 420183001H","title":"SABINE PASS LNG, L.P. (Cheniere) — Corrective Action Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":"2018-02-08","effective_on":null,"summary":"OPEN corrective action order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420183001h.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420183001h.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420183001h","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420183001H","body":"Corrective Action Order involving SABINE PASS LNG, L.P. (Cheniere). The dataset does not identify a cited regulation for this case. The case was opened on 2018-02-08 and is reported as open. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420183001H_Corrective Action Order_02082018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_Corrective%20Action%20Order_02082018.pdf\n\n420183001H_Corrective Action Order_02082018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_Corrective%20Action%20Order_02082018_text.pdf\n\n420183001H_Operator Request for Hearing And Request For Case File (Statement of Issues)_02162018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_Operator%20Request%20for%20Hearing%20And%20Request%20For%20Case%20File%20(Statement%20of%20Issues)_02162018.pdf\n\n420183001H_PHC Consent Agreement And Order_04202018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_PHC%20Consent%20Agreement%20And%20Order_04202018.pdf\n\n420183001H_PHC Consent Agreement And Order_04202018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_PHC%20Consent%20Agreement%20And%20Order_04202018_text.pdf\n\n420183001H_PHC Final Determination Redacted_02112019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_PHC%20Final%20Determination%20Redacted_02112019.pdf\n\n420183001H_PHC Hearing Scheduled_03062018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_PHC%20Hearing%20Scheduled_03062018.pdf\n\n420183001H_PHC Hearing Scheduled_03062018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420183001H/420183001H_PHC%20Hearing%20Scheduled_03062018_text.pdf\n\n420183001H_PHC Hearing Scheduled_03062018_text.pdf\n\nMarch 6, 2018\nVIA CERTIFIED MAIL AND EMAIL TO: Michael.Weller@cheniere.com and\nMary.McDaniel@dot.gov\nMr. Michael Weller\nSenior Counsel\nCheniere Energy, Inc.\n700 Milam Street, Suite 1900\nHouston, TX 77002\nMs. Mary McDaniel\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n8701 South Gessner, Suite 630\nHouston, Texas 77074\nRe: Notice of Hearing, Sabine Pass Liquefaction, LLC\nCPF No. 4-2018-3001H\nDear Mr. Weller and Ms. McDaniel:\nIn accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Corrective\nAction Order issued by the Office of Pipeline Safety in the above-referenced case. The hearing will\ntake place on March 21, 2018, beginning at 9:00 a.m. Central Time.\nThe hearing will be held at the PHMSA Southwest Region office, 8701 South Gessner, Suite 630,\nHouston, TX 77074. Upon arrival at the building, attendees will be required to present photo\nidentification to security personnel. A contact phone number for the day of the hearing is\n(713) 272-2859.\nBoth parties must submit and exchange any additional written materials they intend to present at\nleast 10 calendar days prior to the hearing (March 11, 2018), along with a list of attendees, and the\nnames of any witnesses who may testify. You may provide this information electronically. If you\nhave any questions, please contact me at (202) 366-6139 or at kristin.baldwin@dot.gov.\n\n\n\nCPF No. 4-2018-3001H\nPage 2\nIf you have any questions, please do not hesitate to contact me.\nSincerely,\nKristin Baldwin\nPresiding Official\ncc (email): Mr. Adam Phillips, Counsel, Southwest Region, OPS\nMs. Lauren Clegg, Counsel, Southwest Region, OPS\n\n420183001H_Corrective Action Order_02082018_text.pdf\n\nFebruary 8, 2018\nVIA CERTIFIED MAIL AND EMAIL TO: (703) 375-6000\nMr. Douglas D. Shanda\nPresident, Sabine Pass Liquefaction, LLC &\nSenior Vice President, Operations, Cheniere Energy, Inc.\n700 Milam Street\nSuite 1900\nHouston, TX 77002\nCPF No. 4-2018-3001H\nDear Mr. Shanda:\nEnclosed please find a Corrective Action Order (CAO) issued by the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), in the above-\nreferenced case. It requires Sabine Pass Liquefaction, LLC, to take certain corrective actions with\nrespect to LNG tanks in the Sabine Pass Liquefaction Facility operating in Cameron Parish,\nLouisiana, that experienced an LNG and natural gas release on January 22, 2018.\nService of this CAO is being made by certified mail and facsimile. Service of the CAO by\nelectronic transmission is deemed complete upon transmission and acknowledgement of receipt,\nor as otherwise provided under 49 C.F.R. § 190.5. The terms and conditions of this Order are\neffective upon completion of service.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure: CAO\ncc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nMr. Frank Causey, Acting Region Director, Southwestern Region, OPS\nMr. Jack A. Fusco, President and Chief Executive Officer, Cheniere Energy, Inc.\nMr. Paul Nielson, Lead Advisor, Compliance, Cheniere Energy, Inc.\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 )\nSabine Pass Liquefaction, LLC,\na subsidiary of Cheniere Energy, Inc.,\n)\n)\n)\n)\nRespondent. )\n)\n)\n_______________________________________________ )\n) CPF No. 4-2018-3001H\nCORRECTIVE ACTION ORDER\nPurpose and Background:\nThis Corrective Action Order (CAO or Order) is being issued under the authority of 49 U.S.C.\n§ 60112 to require Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy, Inc. (Sabine\nor Respondent), to take the necessary corrective actions to protect the public, property, and the\nenvironment from potential hazards associated with the January 22, 2018 release from Tank S-\n103 in the company’s Sabine Pass Liquefaction Facility (Sabine Pass Facility or Facility).1\nOn January 22, 2018, workers discovered a release of liquefied natural gas (LNG), which is\nnatural gas having methane (CH4) as its major constituent and that is converted to a liquid (or\n“cryogenic”) state of -260º F from Tank S-103. Tank S-103 experienced a release of LNG into\nthe annulus (i.e., the space between the inner and outer tank walls), which eventually caused\ncracks in the outer tank wall and the pooling of LNG in the secondary containment area\nsurrounding the tank (Incident). Exposure of LNG to the carbon steel outer tank resulted in the\ncooling of the outer tank wall to a temperature far below its design temperature of -25º F and the\nformation of four separately-identifiable cracks. These cracks propagated to a length of\napproximately one to six feet in length in a short amount of time.\nAfter launching an investigation into the release, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), learned that Tank S-1012 had also\n1 Tank S-103 is one of five operating LNG storage tanks at the Facility in Cameron Parish, Louisiana. The other\ntanks (S-101 / S-102 / S-104 / S-105) are all designed to the same specifications. Tanks S-101, S-102 and S-103 were\nmanufactured by a different manufacturer than Tanks S-104 and S-105.\n2 Tank S-102 has also experienced releases of LNG from the inner tank into the annular space, but Tank S-102 is\nnot included as one of the “Affected Tanks” described below.\n\n\n\nCPF No. 4-2018-3001H\nPage 2\nexperienced releases of LNG from the inner tank into the annular space. This raises the\npossibility that the conditions which resulted in the Incident may be present in multiple tanks.\nSabine reported no injuries or fatalities as a result of the Incident, and there were no reported\nfires or explosions. The cause of the Incident has not yet been determined. Pursuant to 49\nU.S.C. § 60117, PHMSA, Office of Pipeline Safety (OPS), has initiated an investigation of the\nIncident. The preliminary findings of the agency's ongoing investigation are as follows:\nPreliminary Findings:\n Sabine owns and operates two major LNG terminals, i.e., the Sabine Pass Facility and\nthe Corpus Christi LNG Terminal. The Sabine Pass Facility is located on a site\nconsisting of more than 1,000 acres along the Sabine Pass River between Texas and\nLouisiana in Cameron Parish, Louisiana. The nearest town is Johnson Bayou,\nLouisiana. There are approximately 500 Sabine employees and contractors onsite to\nsupport the Facility’s operations.\n There are two berths and five LNG storage tanks at the Facility. All five LNG\nstorage tanks were designed by Mitsubishi Heavy Industries, Ltd. (MHI). Tanks S-\n101, S-102, and S-103 were fabricated by Matrix Service, Inc., from 2005-2008 and\nplaced in service in 2008. Tanks S-104 and S-105 were fabricated by Zachry\nIndustrial, Inc., from 2006-2009 and placed in service in 2009. The Facility has been\nused for import since 2008, and liquefaction capabilities have been going into service\nfor export since 2016.3 All tanks tie into an interconnected boil-off gas system.\n The Incident occurred in Tank S-103, one of the five on-site storage tanks that each\nhave 3.4 billion cubic feet equivalent capacity (Bcfe) for LNG (total of 17 Bcfe).\nPHMSA was notified of the release of LNG from Tank S-103 via NRC Report No.\n1202595, but only after PHMSA initiated its investigation into the release did\nPHMSA learn that Tank S-101 had also experienced releases of LNG into its annular\nspace, and was actively leaking natural gas vapors at 14 sites along the base of the\ntank. (Tank S-103 and Tank S-101 are referred to herein as the “Affected Tanks.”)\n On January 22, 2018, Sabine workers discovered a release of LNG from Tank S-103.\nTank S-103 experienced a release of LNG into the annulus and the LNG eventually\nescaped through four separate cracks in the outer tank and pooled in the secondary\ncontainment area surrounding the tank. Exposure of LNG to the carbon steel outer\ntank resulted in cooling of the outer tank wall to a temperature far below its design\ntemperature of -25º F. These cracks propagated to a length of approximately one to\nsix feet in length in a short amount of time, because when steel fails at low\ntemperatures, it fails in a brittle manner. Brittle failures do not leak before failing so\nthere is no warning before failure.\n3 See http://www.cheniere.com/terminals/sabine-pass/. Current as of 2/6/2018.\n\n\n\nCPF No. 4-2018-3001H\nPage 3\n Upon discovery of the Incident, Sabine isolated Tank S-103, commenced de-\ninventorying of LNG from the tank, and lowered the pressure in the tank annulus and\nboil-off gas system. The level of LNG in the inner tank is currently oscillating\nbetween 1-3 feet to maintain the thermal condition needed for the inner nickel steel\ntank which contains the LNG. The operator’s Emergency Management Team (EMT)\nwas deployed to control the access point to Tank S-103 around the clock. The EMT\nhas real-time monitoring and reporting for gas emissions, and is maintaining 24-hour\ncoverage around the containment dike. The area around Tank S-103 was roped-off to\nlimit potential ignition sources and the road closest to the tank was closed to vehicle\ntraffic. Sabine also notified the occupants of the adjacent property of the situation.\nSabine then issued “hot work” permits so that personnel could enter the area where\nthere are gas vapors to better assess the tank. The fire and water systems were not\nactivated. Other plant operations continue as normal.\n Both the Federal Energy Regulatory Commission (FERC) and PHMSA have\nresponded to the scene to assess the situation.\n The vertical through-wall cracks in approximately four separate areas on the carbon\nsteel outer shell of Tank S-103 were a result of the exposure of the outer wall to\nliquid at temperatures significantly below the outer tank’s design temperature of -25º\nF. However, the cause of the release of LNG into the annulus is unknown. No\nexternal cracking was observed on any other tanks to date. To date, neither Tank S-\n103 nor Tank S-101 has been completely removed from LNG service.\n After initiating its investigation, PHMSA received from Sabine a copy of a prior\ninvestigative report that Sabine commissioned from Matrix and received in March\n2017. That report documented 11 past upsets (dating from 2008-2016) on Tank S-103\nand surmised that under certain flow conditions, when using the bottom fill line, LNG\nmight splash over the top of the inner tank into the annular space (\"geyser-type\neffect\"). The operator has indicated that it believes this geyser-type effect also\noccurred on Tank S-101, as both tanks are designed and operated in the same manner.\n Tanks S-104 & S-105 appear to be unaffected by the Incident on January 22, 2018 as\nreported by the operator.\n Unintended releases of LNG are rare and are described as “low-frequency, high-\nconsequence” events.\n To date, Sabine has been unable to correct the long-standing safety concerns\ndescribed above involving the Affected Tanks, cannot validate the exact source or\namount of the LNG that may have leaked into the annulus of the Affected Tanks, and\ncannot identify the circumstances that allowed the LNG to escape containment in the\nfirst place. Unintentional release of LNG can result in a serious hazard to people and\nproperty.\n\n\n\nCPF No. 4-2018-3001H\nPage 4\nDetermination of Necessity for Corrective Action Order and Right to Hearing:\nSection 60112 of Title 49, United States Code, provides for the issuance of a Corrective Action\nOrder, after reasonable notice and the opportunity for a hearing, requiring corrective action,\nwhich may include the suspended or restricted use of a pipeline facility, physical inspection,\ntesting, repair, replacement, or other action, as appropriate. The basis for making the\ndetermination that a pipeline facility is hazardous and requiring corrective action is set forth both\nin the above-referenced statute and 49 C.F.R.§ 190.233.\nSection 60112, and the regulations promulgated thereunder, provide for the issuance of a\nCorrective Action Order without prior opportunity for notice and hearing upon a finding that\nfailure to issue the Order expeditiously will likely result in serious harm to life, property or the\nenvironment. In such cases, an opportunity for a hearing will be provided as soon as practicable\nafter the issuance of the Order.\nThe Sabine Pass Facility is governed by Section 60101 of Title 49, United States Code, as\ndetailed in 49 C.F.R. Section 193.\nAfter evaluating the foregoing preliminary findings of fact and considering the ongoing\ninvestigation of the Incident, I find that the continued operation of the Affected Tanks without\ncorrective measures is or would be hazardous to life, property and the environment.\nAdditionally, after considering the presence of approximately 500 Sabine employees and\ncontractors onsite, the potential for disruption to major transportation modes (including highways\nand waterways), the hazardous nature of the product being stored, the unpredictability of brittle\nfailures and ignition sources, the newly-discovered history (2008-2016) of similar problems that\nhave been present since the Facility came on-line, the uncertainties as to the cause of the\nIncident, and the ongoing investigations to determine the cause of the Incident, I find that a\nfailure to issue this Order expeditiously to require immediate corrective action would result in\nlikely serious harm to life, property, and the environment.\nAccordingly, this Corrective Action Order mandating immediate corrective action is issued\nwithout prior notice and opportunity for a hearing. The terms and conditions of this Order are\neffective upon receipt.\nWithin 10 days of receipt of this Order, Respondent may request a hearing, to be held as soon as\npracticable, by notifying the Associate Administrator for Pipeline Safety in writing, with a copy\nto the Director, Southwestern Region, PHMSA (Director). If a hearing is requested, it will be\nheld telephonically or in-person in Houston, Texas, unless a different location is expressly\nagreed to in writing by the Director.\nAfter receiving and analyzing additional data in the course of this investigation, PHMSA may\nidentify other corrective measures that need to be taken. Respondent will be notified of any\nadditional measures required and, if appropriate, PHMSA will consider amending this Order. To\nthe extent consistent with safety, Respondent will be afforded notice and an opportunity for a\nhearing prior to the imposition of any additional corrective measures.\n\n\n\nCPF No. 4-2018-3001H\nPage 5\nRequired Corrective Actions:\nDefinitions:\nAffected Tanks – Means Respondent’s Tank S-103 and Tank S-101 and their Tank\nSystems at the Facility.\nDirector – Means the Director, Pipeline and Hazardous Materials Safety Administration,\nOffice of Pipeline Safety, Southwest Region.\nRemove from Service – Means to isolate and purge hydrocarbons so that the internal and\nexternal environment is in such a state where inspection, assessment and remedial repair\nwork can safely occur.\nTank System – Means the tank system for each LNG tank at the Facility and includes the\nnickel steel inner tank and the carbon steel outer tank and related facilities and\nappurtenances.\nPursuant to 49 U.S.C. 60112, I hereby order Sabine to immediately take the following corrective\nactions for the Affected Tanks:\n1. Remove from Service: Within seven days following receipt of this Order, Sabine\nmust provide to the Director, for approval, a timeline and plan for removing the\nAffected Tanks from service.\nWork Plan: Within 30 days following receipt of this Order, Sabine must develop\nand submit a detailed comprehensive work plan that includes tank-specific\npurging plans, a root-cause analysis plan, a detailed repair and modification plan,\na continuing operation plan for facilities that remain in service, and a plan to\nreturn the Affected Tanks to service (Work Plan). This plan must be submitted to\nthe Director for prior approval.\nQualified Independent Third-Parties: Sabine must engage the services of\nqualified independent third-parties to assist in the development of the Work Plan\nand to perform the work in the approved Work Plan. Sabine must submit the\nproposed third-party experts and their qualifications to the Director for prior\nconcurrence. The third parties performing the work identified in the Work Plan\nmust provide all reports to the Director at the same time as they are provided to\nSabine.\nRoot Cause Failure Analysis: Within 120 days following receipt of this Order,\nSabine must complete a root cause failure analysis (RCFA) that is facilitated and\nvalidated by an independent third-party vendor acceptable to the Director. The\nRCFA must document all contributory factors and the decision-making process.\nSabine must submit a final report of the RCFA to the Director, including any\n2. 3. 4.\n\n\n\nCPF No. 4-2018-3001H\nPage 6\n5. 6. lessons learned and whether the findings are applicable to other tanks within the\nFacility.\nReview of Other Tank Systems: Within 60 days of the completion of the final\nRCFA, Sabine must evaluate Tank S-102, Tank S-104 and Tank S-105 and their\nTank Systems within the Facility to determine if they are subject to the same\ncausal factors identified in the RCFA. Sabine must document this evaluation,\ndescribe what actions will be taken to address the results of the evaluation, and\nsubmit the documentation to the Director. If the evaluation finds that the other\ntanks are subject to the same causal factors, Sabine must explain how it will\nensure these other tanks are operated safely while they develop the Work Plan\nunder the requirements of #2 above.\nReturn to Service: Sabine may not return to service the Affected Tanks until\nauthorized to do so by the Director. Prior to returning the Affected Tanks to\nservice, Sabine must develop a fitness-for-service plan, that meets the\nrequirements of API RP 579-1 / ASME FFS-1, Fitness-For-Service (3rd edition),\nissued in June 2016; complete all permanent repairs in accordance with 49 C.F.R.\n§ 193.2617 and API Standard 653, Tank Inspection, Repair, Alteration, and\nReconstruction (5th edition), issued in November 2014; and complete all\nrecommendations from the RCFA.\nEmergency Response Plan and Training Review. Sabine must review and\nassess the effectiveness of its emergency response plan and emergency response\ntraining with regards to the Incident. This must include on-scene response,\nsupport, coordination, and communication with state and local emergency\nresponders and public officials. Sabine must amend its emergency response plan\nand emergency training, if necessary, to reflect the results of this review. The\ndocumentation of this review must be available for inspection by PHMSA or\nprovided to the Director, if requested.\nOther Requirements:\n8. Request for Information of Prior Known Events: Within 30 days following the\nreceipt of this Order, Sabine must provide the Director with all previous known\nevents in which any of Sabine’s tank systems at the Facility were operated outside\nof design specifications and/or LNG has spilled into the annulus or vapor escaped\nfrom the outer tank, including conditions that existed, actions taken to mitigate\nevents, all inspections and assessments performed to ensure the integrity of the\ntanks after the events, and modifications that were made to prevent future\nexceedances or incidents.\nReporting. Sabine must submit monthly reports to the Director that: (1) include\nall available data and results of the testing and evaluations required by this Order;\nand (2) describe the progress of the repairs or other remedial actions being\n7. 9.\n\n\n\nCPF No. 4-2018-3001H\nPage 7\n10. 11. 12. 13. undertaken. The first monthly report is due on March 15, 2018. The Director\nmay change the interval for the submission of these reports.\nDocumentation of Costs. It is requested, but not required, that Respondent\nmaintain documentation of the costs associated with implementation of this\nOrder. Sabine should include in each monthly report the to-date total costs\nassociated with: (1) physical changes to Sabine’s LNG tank system, including\nrepairs, replacements and other modifications; (2) preparation and revision of\nprocedures, studies and analyses; and (3) environmental remediation, if\napplicable.\nApprovals. With respect to each submission that under this Order requires the\napproval of the Director, the Director may: (a) approve, in whole or part, the\nsubmission; (b) approve the submission on specified conditions; (c) modify the\nsubmission to cure any deficiencies; (d) disapprove, in whole or in part, the\nsubmission, directing that Sabine modify the submission; or (e) any combination\nof the above. In the event of approval, approval upon conditions, or modification\nby the Director, Respondent will proceed to take all action required by the\nsubmission as approved or modified by the Director. If the Director disapproves\nall or any portion of the submission, Respondent will correct all deficiencies\nwithin the time specified by the Director, and resubmit it for approval. If a\nresubmitted item is disapproved in whole or in part, the Director may again\nrequire Respondent to correct the deficiencies in accordance with the foregoing\nprocedure, and the Director may otherwise proceed to enforce the terms of this\nOrder.\nExtensions of Time. The Director may grant an extension of time for compliance\nwith any of the terms of this Order upon a written request timely submitted\ndemonstrating good cause for an extension.\nDocument Production. To expedite the review and assessment of relevant\ndocumentation, Sabine must produce electronic versions (in their original format)\nof any and all records requested by the Director and related to this CAO in a\nphysical medium, such CD-ROM, DVD, or flash drive, unless specifically asked\nto do otherwise. Since FERC and PHMSA both have jurisdiction over the\nFacility and are coordinating their investigations of the Incident, Sabine must\nprovide all such records to FERC simultaneously as they are provided to PHMSA.\nBe advised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. § 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. § 552(b).\n\n\n\nCPF No. 4-2018-3001H\nPage 8\nIn your correspondence on this matter, please refer to \"CPF No. 4-2018-3001H” and for each\ndocument you submit, please provide a copy in electronic format whenever possible. The\nactions required by this Order are in addition to and do not waive any requirements that apply to\nRespondent's pipeline system under 49 C.F.R. Parts 190 through 199, under any other order\nissued to Respondent under authority of 49 U.S.C. Chapter 601, or under any other provision of\nFederal or State law.\nRespondent may appeal any decision of the Director to the Associate Administrator for Pipeline\nSafety. Decisions of the Associate Administrator shall be final.\nFailure to comply with this Order may result in the assessment of civil penalties and in referral to\nthe Attorney General for appropriate relief in United States District Court pursuant to\n49 U.S.C. § 60120.\nThe terms and conditions of this Order are effective upon service in accordance with 49 C.F.R.\n§ 190.5.\nFebruary 8, 2018\n_________________________________ ________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420183001H_PHC Consent Agreement And Order_04202018_text.pdf\n\nVIA EMAIL AND CERTIFIED MAIL:\nMr. Douglas D. Shanda\nPresident, Sabine Pass Liquefaction, LLC &\nSenior Vice President, Operations, Cheniere Energy, Inc.\n700 Milam Street, Suite 1900\nHouston, Texas 77002\nRE: In the Matter of Sabine Pass Liquefaction, LLC – CPF No. 4-2018-3001H\nDear Mr. Shanda:\nEnclosed please find the fully executed Consent Agreement and Order that resolves the issues\nunderlying the Corrective Action Order issued by PHMSA on February 8, 2018, in the above-\nreferenced proceeding. Service of the Consent Agreement and Order by email and certified mail\nis deemed effective upon the date of mailing, or as otherwise provided 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: Ms. Mary McDaniel, Director, Southwest Region, OPS\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, Pipeline\nSafety, OPS\nMr. Michael Weller, Senior Counsel, Cheniere Energy, Inc.\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of )\nSabine Pass Liquefaction, LLC, ) CPF No. 4-2018-3001H\na subsidiary of Cheniere Energy Partners, LP, )\nRespondent. )\n)\n)\n)\n)\nCONSENT AGREEMENT AND ORDER\nOn February 8, 2018, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) issued a Corrective Action Order (CAO) pursuant to 49 U.S.C. § 60112 and 49 C.F.R.\n§ 190.233, to require Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners,\nLP (Sabine or Respondent), to take the necessary corrective actions to protect the public,\nproperty, and the environment from potential hazards associated with a release of liquefied\nnatural gas (LNG) from Tank S-103 at the company’s Sabine Pass Liquefaction Facility (Sabine\nPass Facility or Facility) that occurred on January 22, 2018.\nOn February 16, 2018, Sabine submitted to PHMSA a Request for Hearing and Statement\nof Issues, challenging the terms, findings and determinations of the CAO. A Presiding Official\nfrom PHMSA’s Office of Chief Counsel scheduled a hearing for March 21, 2018, in accordance\nwith 49 C.F.R. §§ 190.211 and 190.233(c).\nOn March 21, 2018, a hearing was held in Houston, Texas, at PHMSA’s Southwest\nRegion Office before the Presiding Official. Following the hearing, PHMSA and Sabine\n(collectively, Parties) entered into discussions to potentially resolve the CAO through an\nadministrative consent agreement, thereby avoiding further administrative proceedings or\nlitigation, pursuant to 49 C.F.R. Part 190. Accordingly, upon consent and agreement of the\nParties and in accordance with 49 C.F.R. § 190.219, PHMSA and Sabine hereby agree to the\nterms and conditions set forth in this Consent Agreement and Order (Agreement and Order) to\nresolve the issues underlying the CAO and to replace and supersede the CAO, as provided in\nParagraph 10 below.\nI. General Provisions\n1. Respondent acknowledges that the Facility located in Cameron Parish, Louisiana,\nis subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. 60101, et seq., and the\nregulations and administrative orders issued thereunder. Respondent further acknowledges that\nit received proper notice of PHMSA’s action in this proceeding and that the CAO states claims\n\n\n\nCPF No. 4-2018-3001H\nPage 2\nupon which relief may be granted pursuant to 49 U.S.C. 60101, et seq., and the regulations and\norders issued thereunder.\n2. Respondent agrees to complete the corrective actions specified in Section II of\nthis Agreement and Order (Corrective Measures) and to abide by the terms of this Agreement\nand Order. This Agreement and Order does not constitute a finding of violation of any Federal\nlaw or regulation and may not be used in any civil or administrative proceeding of any kind as\nevidence or proof of any fact, fault or liability, or as evidence of the violation of any law, rule,\nregulation or requirement, except in a proceeding to enforce the provisions of this Agreement\nand Order.\n3. Respondent consents to the issuance of this Agreement and Order, and hereby\nwaives any further procedural requirements with respect to its issuance. Respondent waives all\nrights to contest the adequacy of notice, or the validity of this Agreement and Order, including\nall rights to administrative or judicial hearings, reviews, or appeals.\n4. This Agreement and Order shall apply to, and be binding upon, PHMSA and\nSabine, its officers, directors, and employees, and its successors, assigns, or other entities or\npersons otherwise bound by law. Respondent agrees to provide a copy of this Agreement and\nOrder and any incorporated work plans and schedules to all of Sabine’s officers, employees, and\nagents whose duties might reasonably include compliance with this Agreement and Order.\n5. For any transfer of ownership or operating responsibility of the Sabine Facility\noccurring during the term of this Agreement and Order, Respondent will provide a copy of this\ndocument to the prospective transferee at least 30 days prior to such transfer and simultaneously\nprovide written notice of the prospective transfer to the PHMSA Southwest Region Director\n(Director).\n6. This Agreement and Order constitutes the final, complete and exclusive agreement\nand understanding between the Parties with respect to the settlement embodied herein. The\nParties acknowledge that there are no representations, agreements, or understandings relating to\nsettlement other than those expressly contained in this Agreement and Order, except that the terms\nof the CAO and the administrative case file may be used to construe the terms of this Agreement\nand Order.\n7. Nothing in this Agreement and Order affects or relieves Respondent of its\nresponsibility to comply with all applicable requirements of the Federal pipeline safety laws, 49\nU.S.C. § 60101, et seq., and the regulations and orders issued thereunder. Nothing in this\nAgreement and Order alters PHMSA’s right of access, entry, inspection, and information\ngathering, or PHMSA’s authority to bring enforcement action(s) against Sabine pursuant to the\nFederal pipeline safety laws, the regulations and orders issued thereunder, or any other provision\nof Federal or State law, including additional enforcement action relating to the January 2018\nrelease.\n8. This Agreement and Order does not waive or modify any Federal, State, or local\nlaw or regulation applicable to Respondent’s Facility. This Agreement and Order is not a permit,\n\n\n\nCPF No. 4-2018-3001H\nPage 3\nor a modification of any permit, under any Federal, State, or local laws or regulations. Sabine\nremains responsible for achieving and maintaining compliance with all applicable Federal, State,\nand local laws, regulations and permits.\n9. This Agreement and Order does not create rights in, or grant any cause of action\nto, any third party not party to this Agreement and Order. PHMSA is not liable for any injuries\nor damages to persons or property arising from acts or omissions of Respondent or its officers,\nemployees, or agents carrying out the work required by this Agreement and Order. Sabine agrees\nto hold harmless PHMSA, its officers, employees, agents, and representatives from any and all\ncauses of action arising from any acts or omissions of Respondent or its contractors in carrying\nout any work required by this Agreement and Order.\n10. in all respects.\nUpon the Effective Date of this Agreement and Order, the Parties agree that the\nCAO will be of no further force or effect and this Agreement and Order shall supersede the CAO\nII. Corrective Measures\n11. Definitions. For purposes of this Section II, the following definitions shall apply:\nRemoval from Service – Means the isolating and purging of hydrocarbons from an LNG tank so\nthat inspection, assessment and remedial repair work can safely occur.\nRemoved from Operation – Means to have removed an LNG tank from its commercial and\noperational service.\nTank System – Means the tank system for each LNG tank at the Facility and includes the nickel\nsteel inner tank, the carbon steel outer tank, and related facilities.\n12. Tank S-103.\ni. Removal from Service: The Parties acknowledge that Sabine has removed Tank\nS-103 from operation and provided to the Director an initial timeline and plan for removing Tank\nS-103 from service to facilitate a full investigation. On April 12, 2018, the Director approved\nSabine’s LNG Tank S-103 Piping De-Inventory, Inerting and Isolation, Tank S-103 Warm-Up\nUsing Defrost Gas From Liquefaction, and Tank S-103 LNG Tank Hydrocarbon Freeing with\nNitrogen Plans.\nii. Work Plan: The Parties acknowledge that Sabine has submitted to the Director\nfor approval a work plan that includes a removal-from-service plan for Tank S-103 (including a\nspecific purging plan), a root cause failure analysis (RCFA) plan, a repair and modification plan,\nand a plan to return Tank S-103 to operation (collectively, Tank S-103 Work Plan). The Director\nshall promptly review the Tank S-103 Work Plan and either approve, reject, or request\nmodification of it in accordance with Paragraph 19 below, with the goal of allowing the orderly\ncommencement of the removal-from-service plan and for the return of Tank S-103 to operation\nas soon as practicable. Any rejection or request for modification of the Tank S-103 Work Plan\n\n\n\nCPF No. 4-2018-3001H\nPage 4\nshall be in writing and state with specificity the basis for the decision and the requirements to\nsecure approval of a revised Tank S-103 Work Plan.\niii. Return to Operation: Sabine may not return Tank S-103 to operation until\nauthorized to do so by the Director. Prior to returning Tank S-103 to operation, Sabine must\ndevelop a fitness-for-service plan that meets the requirements of API RP 579-1 / ASME FFS-1,\nFitness-For-Service (3rd edition), issued in June 2016. All permanent repairs to Tank S-103 shall\nbe completed in manner consistent with 49 C.F.R. Part 193.\n13. Tank S-101.\ni. Submission and Approval of Tank S-101 Temporary Operations Plan: The\nParties acknowledge that Sabine has removed Tank S-101 from operation and must submit to\nthe Director for approval a Tank S-101 Temporary Operations Plan that includes, but is not\nlimited to, any measures already taken to allow for the safe operation of Tank S-101 in\naccordance with 49 C.F.R. Part 193, as follows: (1) resealing the annular plate of Tank S-101 in\naccordance with relevant industry standards; (2) preparing a fitness-for-service plan that meets\nthe requirements of API RP 579-1 / ASME FFS-1, Fitness-For-Service (3rd edition), issued in\nJune 2016; (3) mechanically disabling the bottom-fill line valve; and (4) providing for the\nmonitoring of annular space temperatures set to alarm when conditions exceed Tank S-101’s\ndesign parameters. The Director shall promptly review the Temporary Operations Plan and\neither approve, reject, or request modification of it in accordance with Paragraph 19 below.\nSabine may not return Tank S-101 to operation until the Director approves the Temporary\nOperations Plan.\nii. Evaluation of the RCFA and Submission and Approval of Tank S-101 Work\nPlan: Within 60 days of the completion of the final RCFA under Paragraph 14 below, Sabine\nmust evaluate Tank S-101 to determine if Tank S-101 is subject to similar causal factors\nidentified for Tank S-103 in the RCFA and what factors have already been addressed for Tank\nS-101 in the Temporary Operations Plan. Sabine must document this evaluation, describe what\nactions it intends to take to address the results of the evaluation, and submit to the Director for\napproval a proposed Tank S-101 Work Plan. The Tank S-101 Work Plan may include temporary\nmitigation measures confirmed by a qualified independent third-party expert as being\nappropriate to maintain Tank S-101 in safe operation pending implementation of the Tank S-101\nWork Plan. The Tank S-101 Work Plan shall also include an evaluation of the cause of the\nunexpected vapor seepage from the bottom of Tank S-101 and a repair plan, if required, that is\nconsistent with 49 C.F.R. Part 193 and relevant industry standards. The Director shall promptly\nreview the Tank S-101 Work Plan and either approve, reject, or request modification of it in\naccordance with Paragraph 19 below. Any rejection or request for modification of the Tank S-\n101 Work Plan shall be in writing and state with specificity the basis for the decision and the\nrequirements to secure approval of a revised Tank S-101 Work Plan.\n14. Root Cause Failure Analysis: The Parties acknowledge that the RCFA\ndeveloped by a qualified independent third-party is currently underway. The scope of the RCFA\nincludes an assessment of all five LNG storage tanks at the Facility for similar events pertinent\nto the causal factors of the incident on January 22, 2018. The RCFA shall be completed by May\n\n\n\nCPF No. 4-2018-3001H\nPage 5\n31, 2018, and shall document all contributory factors (including any pertinent operating\ninformation from other tanks at the Sabine Pass Facility) and the report’s decision-making\nprocess. Sabine must submit a final report of the RCFA to the Director and shall include any\nrecommendations and the applicability of the recommendations to the five LNG storage tanks\nwithin the Facility.\n15. Reporting and Review of Other Tank Systems. Commencing on the Effective\nDate, Sabine shall promptly report to the Director any unanticipated or sustained operation of\nthe other tanks at the Facility (i.e., Tanks S-102, S-104, and S-105) outside their design\nparameters. Within 120 days of the completion of the final RCFA on Tank S-103, Sabine must\nevaluate Tanks S-102, Tank S-104, Tank S-105 and their associated Tank Systems, considering\nthe findings of the RCFA. Sabine must provide a copy of that evaluation to the Director.\n16. Qualified Independent Third-Parties. Sabine must continue to engage the\nservices of qualified independent third-parties to assist in the development and performance of\nthe Tank S-103 Work Plan and the Tank S-101 Work Plan, except as otherwise specifically noted\nin this Agreement and Order. Sabine must submit to the Director for prior concurrence the names\nand qualifications of any proposed third-party experts that have not yet been","truncated":true,"body_characters":47893}