SABINE PASS LNG, L.P. (Cheniere) — Corrective Action Order

party submissionOfficial PDF420183001H_Operator Request for Hearing And Request For Case File (Statement of Issues)_02162018.pdf#

case documentOfficial PDF420183001H_PHC Final Determination Redacted_02112019.pdf#

420183001H_PHC Hearing Scheduled_03062018_text.pdf, page 1Official PDFMarch 6, 2018 VIA CERTIFIED MAIL AND EMAIL TO: Michael.Weller@cheniere.com and Mary.McDaniel@dot.gov Mr. Michael Weller Senior Counsel Cheniere Energy, Inc. 700 Milam Street, Suite 1900 Houston, TX 77002 Ms. Mary McDaniel Director, Southwest Region Pipeline and Hazardous Materials Safety Administration 8701 South Gessner, Suite 630 Houston, Texas 77074 Re: Notice of Hearing, Sabine Pass Liquefaction, LLC CPF No. 4-2018-3001H Dear Mr. Weller and Ms. McDaniel: In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Corrective Action Order issued by the Office of Pipeline Safety in the above-referenced case. The hearing will take place on March 21, 2018, beginning at 9:00 a.m. Central Time. The hearing will be held at the PHMSA Southwest Region office, 8701 South Gessner, Suite 630, Houston, TX 77074. Upon arrival at the building, attendees will be required to present photo identification to security personnel. A contact phone number for the day of the hearing is (713) 272-2859. Both parties must submit and exchange any additional written materials they intend to present at least 10 calendar days prior to the hearing (March 11, 2018), along with a list of attendees, and the names of any witnesses who may testify. You may provide this information electronically. If you have any questions, please contact me at (202) 366-6139 or at kristin.baldwin@dot.gov.#

420183001H_PHC Hearing Scheduled_03062018_text.pdf, page 2CPF No. 4-2018-3001H Page 2 If you have any questions, please do not hesitate to contact me. Sincerely, Kristin Baldwin Presiding Official cc (email): Mr. Adam Phillips, Counsel, Southwest Region, OPS Ms. Lauren Clegg, Counsel, Southwest Region, OPS#

420183001H_Corrective Action Order_02082018_text.pdf, page 1Official PDFFebruary 8, 2018 VIA CERTIFIED MAIL AND EMAIL TO: (703) 375-6000 Mr. Douglas D. Shanda President, Sabine Pass Liquefaction, LLC & Senior Vice President, Operations, Cheniere Energy, Inc. 700 Milam Street Suite 1900 Houston, TX 77002 CPF No. 4-2018-3001H Dear Mr. Shanda: Enclosed please find a Corrective Action Order (CAO) issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), in the above- referenced case. It requires Sabine Pass Liquefaction, LLC, to take certain corrective actions with respect to LNG tanks in the Sabine Pass Liquefaction Facility operating in Cameron Parish, Louisiana, that experienced an LNG and natural gas release on January 22, 2018. Service of this CAO is being made by certified mail and facsimile. Service of the CAO by electronic transmission is deemed complete upon transmission and acknowledgement of receipt, or as otherwise provided under 49 C.F.R. § 190.5. The terms and conditions of this Order are effective upon completion of service. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure: CAO cc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS Mr. Frank Causey, Acting Region Director, Southwestern Region, OPS Mr. Jack A. Fusco, President and Chief Executive Officer, Cheniere Energy, Inc. Mr. Paul Nielson, Lead Advisor, Compliance, Cheniere Energy, Inc.#

420183001H_Corrective Action Order_02082018_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 ) Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy, Inc., ) ) ) ) Respondent. ) ) ) _______________________________________________ ) ) CPF No. 4-2018-3001H CORRECTIVE ACTION ORDER Purpose and Background: This Corrective Action Order (CAO or Order) is being issued under the authority of 49 U.S.C. § 60112 to require Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy, Inc. (Sabine or Respondent), to take the necessary corrective actions to protect the public, property, and the environment from potential hazards associated with the January 22, 2018 release from Tank S- 103 in the company’s Sabine Pass Liquefaction Facility (Sabine Pass Facility or Facility).1 On January 22, 2018, workers discovered a release of liquefied natural gas (LNG), which is natural gas having methane (CH4) as its major constituent and that is converted to a liquid (or “cryogenic”) state of -260º F from Tank S-103. Tank S-103 experienced a release of LNG into the annulus (i.e., the space between the inner and outer tank walls), which eventually caused cracks in the outer tank wall and the pooling of LNG in the secondary containment area surrounding the tank (Incident). Exposure of LNG to the carbon steel outer tank resulted in the cooling of the outer tank wall to a temperature far below its design temperature of -25º F and the formation of four separately-identifiable cracks. These cracks propagated to a length of approximately one to six feet in length in a short amount of time. After launching an investigation into the release, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), learned that Tank S-1012 had also 1 Tank S-103 is one of five operating LNG storage tanks at the Facility in Cameron Parish, Louisiana. The other tanks (S-101 / S-102 / S-104 / S-105) are all designed to the same specifications. Tanks S-101, S-102 and S-103 were manufactured by a different manufacturer than Tanks S-104 and S-105. 2 Tank S-102 has also experienced releases of LNG from the inner tank into the annular space, but Tank S-102 is not included as one of the “Affected Tanks” described below.#

420183001H_Corrective Action Order_02082018_text.pdf, page 3CPF No. 4-2018-3001H Page 2 experienced releases of LNG from the inner tank into the annular space. This raises the possibility that the conditions which resulted in the Incident may be present in multiple tanks. Sabine reported no injuries or fatalities as a result of the Incident, and there were no reported fires or explosions. The cause of the Incident has not yet been determined. Pursuant to 49 U.S.C. § 60117, PHMSA, Office of Pipeline Safety (OPS), has initiated an investigation of the Incident. The preliminary findings of the agency's ongoing investigation are as follows: Preliminary Findings:  Sabine owns and operates two major LNG terminals, i.e., the Sabine Pass Facility and the Corpus Christi LNG Terminal. The Sabine Pass Facility is located on a site consisting of more than 1,000 acres along the Sabine Pass River between Texas and Louisiana in Cameron Parish, Louisiana. The nearest town is Johnson Bayou, Louisiana. There are approximately 500 Sabine employees and contractors onsite to support the Facility’s operations.  There are two berths and five LNG storage tanks at the Facility. All five LNG storage tanks were designed by Mitsubishi Heavy Industries, Ltd. (MHI). Tanks S- 101, S-102, and S-103 were fabricated by Matrix Service, Inc., from 2005-2008 and placed in service in 2008. Tanks S-104 and S-105 were fabricated by Zachry Industrial, Inc., from 2006-2009 and placed in service in 2009. The Facility has been used for import since 2008, and liquefaction capabilities have been going into service for export since 2016.3 All tanks tie into an interconnected boil-off gas system.  The Incident occurred in Tank S-103, one of the five on-site storage tanks that each have 3.4 billion cubic feet equivalent capacity (Bcfe) for LNG (total of 17 Bcfe). PHMSA was notified of the release of LNG from Tank S-103 via NRC Report No. 1202595, but only after PHMSA initiated its investigation into the release did PHMSA learn that Tank S-101 had also experienced releases of LNG into its annular space, and was actively leaking natural gas vapors at 14 sites along the base of the tank. (Tank S-103 and Tank S-101 are referred to herein as the “Affected Tanks.”)  On January 22, 2018, Sabine workers discovered a release of LNG from Tank S-103. Tank S-103 experienced a release of LNG into the annulus and the LNG eventually escaped through four separate cracks in the outer tank and pooled in the secondary containment area surrounding the tank. Exposure of LNG to the carbon steel outer tank resulted in cooling of the outer tank wall to a temperature far below its design temperature of -25º F. These cracks propagated to a length of approximately one to six feet in length in a short amount of time, because when steel fails at low temperatures, it fails in a brittle manner. Brittle failures do not leak before failing so there is no warning before failure. 3 See http://www.cheniere.com/terminals/sabine-pass/. Current as of 2/6/2018.#

420183001H_Corrective Action Order_02082018_text.pdf, page 4CPF No. 4-2018-3001H Page 3  Upon discovery of the Incident, Sabine isolated Tank S-103, commenced de- inventorying of LNG from the tank, and lowered the pressure in the tank annulus and boil-off gas system. The level of LNG in the inner tank is currently oscillating between 1-3 feet to maintain the thermal condition needed for the inner nickel steel tank which contains the LNG. The operator’s Emergency Management Team (EMT) was deployed to control the access point to Tank S-103 around the clock. The EMT has real-time monitoring and reporting for gas emissions, and is maintaining 24-hour coverage around the containment dike. The area around Tank S-103 was roped-off to limit potential ignition sources and the road closest to the tank was closed to vehicle traffic. Sabine also notified the occupants of the adjacent property of the situation. Sabine then issued “hot work” permits so that personnel could enter the area where there are gas vapors to better assess the tank. The fire and water systems were not activated. Other plant operations continue as normal.  Both the Federal Energy Regulatory Commission (FERC) and PHMSA have responded to the scene to assess the situation.  The vertical through-wall cracks in approximately four separate areas on the carbon steel outer shell of Tank S-103 were a result of the exposure of the outer wall to liquid at temperatures significantly below the outer tank’s design temperature of -25º F. However, the cause of the release of LNG into the annulus is unknown. No external cracking was observed on any other tanks to date. To date, neither Tank S- 103 nor Tank S-101 has been completely removed from LNG service.  After initiating its investigation, PHMSA received from Sabine a copy of a prior investigative report that Sabine commissioned from Matrix and received in March 2017. That report documented 11 past upsets (dating from 2008-2016) on Tank S-103 and surmised that under certain flow conditions, when using the bottom fill line, LNG might splash over the top of the inner tank into the annular space ("geyser-type effect"). The operator has indicated that it believes this geyser-type effect also occurred on Tank S-101, as both tanks are designed and operated in the same manner.  Tanks S-104 & S-105 appear to be unaffected by the Incident on January 22, 2018 as reported by the operator.  Unintended releases of LNG are rare and are described as “low-frequency, high- consequence” events.  To date, Sabine has been unable to correct the long-standing safety concerns described above involving the Affected Tanks, cannot validate the exact source or amount of the LNG that may have leaked into the annulus of the Affected Tanks, and cannot identify the circumstances that allowed the LNG to escape containment in the first place. Unintentional release of LNG can result in a serious hazard to people and property.#

420183001H_Corrective Action Order_02082018_text.pdf, page 5CPF No. 4-2018-3001H Page 4 Determination of Necessity for Corrective Action Order and Right to Hearing: Section 60112 of Title 49, United States Code, provides for the issuance of a Corrective Action Order, after reasonable notice and the opportunity for a hearing, requiring corrective action, which may include the suspended or restricted use of a pipeline facility, physical inspection, testing, repair, replacement, or other action, as appropriate. The basis for making the determination that a pipeline facility is hazardous and requiring corrective action is set forth both in the above-referenced statute and 49 C.F.R.§ 190.233. Section 60112, and the regulations promulgated thereunder, provide for the issuance of a Corrective Action Order without prior opportunity for notice and hearing upon a finding that failure to issue the Order expeditiously will likely result in serious harm to life, property or the environment. In such cases, an opportunity for a hearing will be provided as soon as practicable after the issuance of the Order. The Sabine Pass Facility is governed by Section 60101 of Title 49, United States Code, as detailed in 49 C.F.R. Section 193. After evaluating the foregoing preliminary findings of fact and considering the ongoing investigation of the Incident, I find that the continued operation of the Affected Tanks without corrective measures is or would be hazardous to life, property and the environment. Additionally, after considering the presence of approximately 500 Sabine employees and contractors onsite, the potential for disruption to major transportation modes (including highways and waterways), the hazardous nature of the product being stored, the unpredictability of brittle failures and ignition sources, the newly-discovered history (2008-2016) of similar problems that have been present since the Facility came on-line, the uncertainties as to the cause of the Incident, and the ongoing investigations to determine the cause of the Incident, I find that a failure to issue this Order expeditiously to require immediate corrective action would result in likely serious harm to life, property, and the environment. Accordingly, this Corrective Action Order mandating immediate corrective action is issued without prior notice and opportunity for a hearing. The terms and conditions of this Order are effective upon receipt. Within 10 days of receipt of this Order, Respondent may request a hearing, to be held as soon as practicable, by notifying the Associate Administrator for Pipeline Safety in writing, with a copy to the Director, Southwestern Region, PHMSA (Director). If a hearing is requested, it will be held telephonically or in-person in Houston, Texas, unless a different location is expressly agreed to in writing by the Director. After receiving and analyzing additional data in the course of this investigation, PHMSA may identify other corrective measures that need to be taken. Respondent will be notified of any additional measures required and, if appropriate, PHMSA will consider amending this Order. To the extent consistent with safety, Respondent will be afforded notice and an opportunity for a hearing prior to the imposition of any additional corrective measures.#

420183001H_Corrective Action Order_02082018_text.pdf, page 6CPF No. 4-2018-3001H Page 5 Required Corrective Actions: Definitions: Affected Tanks – Means Respondent’s Tank S-103 and Tank S-101 and their Tank Systems at the Facility. Director – Means the Director, Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety, Southwest Region. Remove from Service – Means to isolate and purge hydrocarbons so that the internal and external environment is in such a state where inspection, assessment and remedial repair work can safely occur. Tank System – Means the tank system for each LNG tank at the Facility and includes the nickel steel inner tank and the carbon steel outer tank and related facilities and appurtenances. Pursuant to 49 U.S.C. 60112, I hereby order Sabine to immediately take the following corrective actions for the Affected Tanks: 1. Remove from Service: Within seven days following receipt of this Order, Sabine must provide to the Director, for approval, a timeline and plan for removing the Affected Tanks from service. Work Plan: Within 30 days following receipt of this Order, Sabine must develop and submit a detailed comprehensive work plan that includes tank-specific purging plans, a root-cause analysis plan, a detailed repair and modification plan, a continuing operation plan for facilities that remain in service, and a plan to return the Affected Tanks to service (Work Plan). This plan must be submitted to the Director for prior approval. Qualified Independent Third-Parties: Sabine must engage the services of qualified independent third-parties to assist in the development of the Work Plan and to perform the work in the approved Work Plan. Sabine must submit the proposed third-party experts and their qualifications to the Director for prior concurrence. The third parties performing the work identified in the Work Plan must provide all reports to the Director at the same time as they are provided to Sabine. Root Cause Failure Analysis: Within 120 days following receipt of this Order, Sabine must complete a root cause failure analysis (RCFA) that is facilitated and validated by an independent third-party vendor acceptable to the Director. The RCFA must document all contributory factors and the decision-making process. Sabine must submit a final report of the RCFA to the Director, including any 2. 3. 4.#

420183001H_Corrective Action Order_02082018_text.pdf, page 7CPF No. 4-2018-3001H Page 6 5. 6. lessons learned and whether the findings are applicable to other tanks within the Facility. Review of Other Tank Systems: Within 60 days of the completion of the final RCFA, Sabine must evaluate Tank S-102, Tank S-104 and Tank S-105 and their Tank Systems within the Facility to determine if they are subject to the same causal factors identified in the RCFA. Sabine must document this evaluation, describe what actions will be taken to address the results of the evaluation, and submit the documentation to the Director. If the evaluation finds that the other tanks are subject to the same causal factors, Sabine must explain how it will ensure these other tanks are operated safely while they develop the Work Plan under the requirements of #2 above. Return to Service: Sabine may not return to service the Affected Tanks until authorized to do so by the Director. Prior to returning the Affected Tanks to service, Sabine must develop a fitness-for-service plan, that meets the requirements of API RP 579-1 / ASME FFS-1, Fitness-For-Service (3rd edition), issued in June 2016; complete all permanent repairs in accordance with 49 C.F.R. § 193.2617 and API Standard 653, Tank Inspection, Repair, Alteration, and Reconstruction (5th edition), issued in November 2014; and complete all recommendations from the RCFA. Emergency Response Plan and Training Review. Sabine must review and assess the effectiveness of its emergency response plan and emergency response training with regards to the Incident. This must include on-scene response, support, coordination, and communication with state and local emergency responders and public officials. Sabine must amend its emergency response plan and emergency training, if necessary, to reflect the results of this review. The documentation of this review must be available for inspection by PHMSA or provided to the Director, if requested. Other Requirements: 8. Request for Information of Prior Known Events: Within 30 days following the receipt of this Order, Sabine must provide the Director with all previous known events in which any of Sabine’s tank systems at the Facility were operated outside of design specifications and/or LNG has spilled into the annulus or vapor escaped from the outer tank, including conditions that existed, actions taken to mitigate events, all inspections and assessments performed to ensure the integrity of the tanks after the events, and modifications that were made to prevent future exceedances or incidents. Reporting. Sabine must submit monthly reports to the Director that: (1) include all available data and results of the testing and evaluations required by this Order; and (2) describe the progress of the repairs or other remedial actions being 7. 9.#

420183001H_Corrective Action Order_02082018_text.pdf, page 8CPF No. 4-2018-3001H Page 7 10. 11. 12. 13. undertaken. The first monthly report is due on March 15, 2018. The Director may change the interval for the submission of these reports. Documentation of Costs. It is requested, but not required, that Respondent maintain documentation of the costs associated with implementation of this Order. Sabine should include in each monthly report the to-date total costs associated with: (1) physical changes to Sabine’s LNG tank system, including repairs, replacements and other modifications; (2) preparation and revision of procedures, studies and analyses; and (3) environmental remediation, if applicable. Approvals. With respect to each submission that under this Order requires the approval of the Director, the Director may: (a) approve, in whole or part, the submission; (b) approve the submission on specified conditions; (c) modify the submission to cure any deficiencies; (d) disapprove, in whole or in part, the submission, directing that Sabine modify the submission; or (e) any combination of the above. In the event of approval, approval upon conditions, or modification by the Director, Respondent will proceed to take all action required by the submission as approved or modified by the Director. If the Director disapproves all or any portion of the submission, Respondent will correct all deficiencies within the time specified by the Director, and resubmit it for approval. If a resubmitted item is disapproved in whole or in part, the Director may again require Respondent to correct the deficiencies in accordance with the foregoing procedure, and the Director may otherwise proceed to enforce the terms of this Order. Extensions of Time. The Director may grant an extension of time for compliance with any of the terms of this Order upon a written request timely submitted demonstrating good cause for an extension. Document Production. To expedite the review and assessment of relevant documentation, Sabine must produce electronic versions (in their original format) of any and all records requested by the Director and related to this CAO in a physical medium, such CD-ROM, DVD, or flash drive, unless specifically asked to do otherwise. Since FERC and PHMSA both have jurisdiction over the Facility and are coordinating their investigations of the Incident, Sabine must provide all such records to FERC simultaneously as they are provided to PHMSA. 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).#

420183001H_Corrective Action Order_02082018_text.pdf, page 9CPF No. 4-2018-3001H Page 8 In your correspondence on this matter, please refer to "CPF No. 4-2018-3001H” and for each document you submit, please provide a copy in electronic format whenever possible. The actions required by this Order are in addition to and do not waive any requirements that apply to Respondent's pipeline system under 49 C.F.R. Parts 190 through 199, under any other order issued to Respondent under authority of 49 U.S.C. Chapter 601, or under any other provision of Federal or State law. Respondent may appeal any decision of the Director to the Associate Administrator for Pipeline Safety. Decisions of the Associate Administrator shall be final. Failure to comply with this Order may result in the assessment of civil penalties and in referral to the Attorney General for appropriate relief in United States District Court pursuant to 49 U.S.C. § 60120. The terms and conditions of this Order are effective upon service in accordance with 49 C.F.R. § 190.5. February 8, 2018 _________________________________ ________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 1Official PDFVIA EMAIL AND CERTIFIED MAIL: Mr. Douglas D. Shanda President, Sabine Pass Liquefaction, LLC & Senior Vice President, Operations, Cheniere Energy, Inc. 700 Milam Street, Suite 1900 Houston, Texas 77002 RE: In the Matter of Sabine Pass Liquefaction, LLC – CPF No. 4-2018-3001H Dear Mr. Shanda: Enclosed please find the fully executed Consent Agreement and Order that resolves the issues underlying the Corrective Action Order issued by PHMSA on February 8, 2018, in the above- referenced proceeding. Service of the Consent Agreement and Order by email and 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, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Ms. Mary McDaniel, Director, Southwest Region, OPS Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, Pipeline Safety, OPS Mr. Michael Weller, Senior Counsel, Cheniere Energy, Inc.#

420183001H_PHC Consent Agreement And Order_04202018_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 ) Sabine Pass Liquefaction, LLC, ) CPF No. 4-2018-3001H a subsidiary of Cheniere Energy Partners, LP, ) Respondent. ) ) ) ) ) CONSENT AGREEMENT AND ORDER On February 8, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Corrective Action Order (CAO) pursuant to 49 U.S.C. § 60112 and 49 C.F.R. § 190.233, to require Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, LP (Sabine or Respondent), to take the necessary corrective actions to protect the public, property, and the environment from potential hazards associated with a release of liquefied natural gas (LNG) from Tank S-103 at the company’s Sabine Pass Liquefaction Facility (Sabine Pass Facility or Facility) that occurred on January 22, 2018. On February 16, 2018, Sabine submitted to PHMSA a Request for Hearing and Statement of Issues, challenging the terms, findings and determinations of the CAO. A Presiding Official from PHMSA’s Office of Chief Counsel scheduled a hearing for March 21, 2018, in accordance with 49 C.F.R. §§ 190.211 and 190.233(c). On March 21, 2018, a hearing was held in Houston, Texas, at PHMSA’s Southwest Region Office before the Presiding Official. Following the hearing, PHMSA and Sabine (collectively, Parties) entered into discussions to potentially resolve the CAO through an administrative consent agreement, thereby avoiding further administrative proceedings or litigation, pursuant to 49 C.F.R. Part 190. Accordingly, upon consent and agreement of the Parties and in accordance with 49 C.F.R. § 190.219, PHMSA and Sabine hereby agree to the terms and conditions set forth in this Consent Agreement and Order (Agreement and Order) to resolve the issues underlying the CAO and to replace and supersede the CAO, as provided in Paragraph 10 below. I. General Provisions 1. Respondent acknowledges that the Facility located in Cameron Parish, Louisiana, is subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. 60101, et seq., and the regulations and administrative orders issued thereunder. Respondent further acknowledges that it received proper notice of PHMSA’s action in this proceeding and that the CAO states claims#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 3CPF No. 4-2018-3001H Page 2 upon which relief may be granted pursuant to 49 U.S.C. 60101, et seq., and the regulations and orders issued thereunder. 2. Respondent agrees to complete the corrective actions specified in Section II of this Agreement and Order (Corrective Measures) and to abide by the terms of this Agreement and Order. This Agreement and Order does not constitute a finding of violation of any Federal law or regulation and may not be used in any civil or administrative proceeding of any kind as evidence or proof of any fact, fault or liability, or as evidence of the violation of any law, rule, regulation or requirement, except in a proceeding to enforce the provisions of this Agreement and Order. 3. Respondent consents to the issuance of this Agreement and Order, and hereby waives any further procedural requirements with respect to its issuance. Respondent waives all rights to contest the adequacy of notice, or the validity of this Agreement and Order, including all rights to administrative or judicial hearings, reviews, or appeals. 4. This Agreement and Order shall apply to, and be binding upon, PHMSA and Sabine, its officers, directors, and employees, and its successors, assigns, or other entities or persons otherwise bound by law. Respondent agrees to provide a copy of this Agreement and Order and any incorporated work plans and schedules to all of Sabine’s officers, employees, and agents whose duties might reasonably include compliance with this Agreement and Order. 5. For any transfer of ownership or operating responsibility of the Sabine Facility occurring during the term of this Agreement and Order, Respondent will provide a copy of this document to the prospective transferee at least 30 days prior to such transfer and simultaneously provide written notice of the prospective transfer to the PHMSA Southwest Region Director (Director). 6. This Agreement and Order constitutes the final, complete and exclusive agreement and understanding between the Parties with respect to the settlement embodied herein. The Parties acknowledge that there are no representations, agreements, or understandings relating to settlement other than those expressly contained in this Agreement and Order, except that the terms of the CAO and the administrative case file may be used to construe the terms of this Agreement and Order. 7. Nothing in this Agreement and Order affects or relieves Respondent of its responsibility to comply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and orders issued thereunder. Nothing in this Agreement and Order alters PHMSA’s right of access, entry, inspection, and information gathering, or PHMSA’s authority to bring enforcement action(s) against Sabine pursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder, or any other provision of Federal or State law, including additional enforcement action relating to the January 2018 release. 8. This Agreement and Order does not waive or modify any Federal, State, or local law or regulation applicable to Respondent’s Facility. This Agreement and Order is not a permit,#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 4CPF No. 4-2018-3001H Page 3 or a modification of any permit, under any Federal, State, or local laws or regulations. Sabine remains responsible for achieving and maintaining compliance with all applicable Federal, State, and local laws, regulations and permits. 9. This Agreement and Order does not create rights in, or grant any cause of action to, any third party not party to this Agreement and Order. PHMSA is not liable for any injuries or damages to persons or property arising from acts or omissions of Respondent or its officers, employees, or agents carrying out the work required by this Agreement and Order. Sabine agrees to hold harmless PHMSA, its officers, employees, agents, and representatives from any and all causes of action arising from any acts or omissions of Respondent or its contractors in carrying out any work required by this Agreement and Order. 10. in all respects. Upon the Effective Date of this Agreement and Order, the Parties agree that the CAO will be of no further force or effect and this Agreement and Order shall supersede the CAO II. Corrective Measures 11. Definitions. For purposes of this Section II, the following definitions shall apply: Removal from Service – Means the isolating and purging of hydrocarbons from an LNG tank so that inspection, assessment and remedial repair work can safely occur. Removed from Operation – Means to have removed an LNG tank from its commercial and operational service. Tank System – Means the tank system for each LNG tank at the Facility and includes the nickel steel inner tank, the carbon steel outer tank, and related facilities. 12. Tank S-103. i. Removal from Service: The Parties acknowledge that Sabine has removed Tank S-103 from operation and provided to the Director an initial timeline and plan for removing Tank S-103 from service to facilitate a full investigation. On April 12, 2018, the Director approved Sabine’s LNG Tank S-103 Piping De-Inventory, Inerting and Isolation, Tank S-103 Warm-Up Using Defrost Gas From Liquefaction, and Tank S-103 LNG Tank Hydrocarbon Freeing with Nitrogen Plans. ii. Work Plan: The Parties acknowledge that Sabine has submitted to the Director for approval a work plan that includes a removal-from-service plan for Tank S-103 (including a specific purging plan), a root cause failure analysis (RCFA) plan, a repair and modification plan, and a plan to return Tank S-103 to operation (collectively, Tank S-103 Work Plan). The Director shall promptly review the Tank S-103 Work Plan and either approve, reject, or request modification of it in accordance with Paragraph 19 below, with the goal of allowing the orderly commencement of the removal-from-service plan and for the return of Tank S-103 to operation as soon as practicable. Any rejection or request for modification of the Tank S-103 Work Plan#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 5CPF No. 4-2018-3001H Page 4 shall be in writing and state with specificity the basis for the decision and the requirements to secure approval of a revised Tank S-103 Work Plan. iii. Return to Operation: Sabine may not return Tank S-103 to operation until authorized to do so by the Director. Prior to returning Tank S-103 to operation, Sabine must develop a fitness-for-service plan that meets the requirements of API RP 579-1 / ASME FFS-1, Fitness-For-Service (3rd edition), issued in June 2016. All permanent repairs to Tank S-103 shall be completed in manner consistent with 49 C.F.R. Part 193. 13. Tank S-101. i. Submission and Approval of Tank S-101 Temporary Operations Plan: The Parties acknowledge that Sabine has removed Tank S-101 from operation and must submit to the Director for approval a Tank S-101 Temporary Operations Plan that includes, but is not limited to, any measures already taken to allow for the safe operation of Tank S-101 in accordance with 49 C.F.R. Part 193, as follows: (1) resealing the annular plate of Tank S-101 in accordance with relevant industry standards; (2) preparing a fitness-for-service plan that meets the requirements of API RP 579-1 / ASME FFS-1, Fitness-For-Service (3rd edition), issued in June 2016; (3) mechanically disabling the bottom-fill line valve; and (4) providing for the monitoring of annular space temperatures set to alarm when conditions exceed Tank S-101’s design parameters. The Director shall promptly review the Temporary Operations Plan and either approve, reject, or request modification of it in accordance with Paragraph 19 below. Sabine may not return Tank S-101 to operation until the Director approves the Temporary Operations Plan. ii. Evaluation of the RCFA and Submission and Approval of Tank S-101 Work Plan: Within 60 days of the completion of the final RCFA under Paragraph 14 below, Sabine must evaluate Tank S-101 to determine if Tank S-101 is subject to similar causal factors identified for Tank S-103 in the RCFA and what factors have already been addressed for Tank S-101 in the Temporary Operations Plan. Sabine must document this evaluation, describe what actions it intends to take to address the results of the evaluation, and submit to the Director for approval a proposed Tank S-101 Work Plan. The Tank S-101 Work Plan may include temporary mitigation measures confirmed by a qualified independent third-party expert as being appropriate to maintain Tank S-101 in safe operation pending implementation of the Tank S-101 Work Plan. The Tank S-101 Work Plan shall also include an evaluation of the cause of the unexpected vapor seepage from the bottom of Tank S-101 and a repair plan, if required, that is consistent with 49 C.F.R. Part 193 and relevant industry standards. The Director shall promptly review the Tank S-101 Work Plan and either approve, reject, or request modification of it in accordance with Paragraph 19 below. Any rejection or request for modification of the Tank S- 101 Work Plan shall be in writing and state with specificity the basis for the decision and the requirements to secure approval of a revised Tank S-101 Work Plan. 14. Root Cause Failure Analysis: The Parties acknowledge that the RCFA developed by a qualified independent third-party is currently underway. The scope of the RCFA includes an assessment of all five LNG storage tanks at the Facility for similar events pertinent to the causal factors of the incident on January 22, 2018. The RCFA shall be completed by May#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 6CPF No. 4-2018-3001H Page 5 31, 2018, and shall document all contributory factors (including any pertinent operating information from other tanks at the Sabine Pass Facility) and the report’s decision-making process. Sabine must submit a final report of the RCFA to the Director and shall include any recommendations and the applicability of the recommendations to the five LNG storage tanks within the Facility. 15. Reporting and Review of Other Tank Systems. Commencing on the Effective Date, Sabine shall promptly report to the Director any unanticipated or sustained operation of the other tanks at the Facility (i.e., Tanks S-102, S-104, and S-105) outside their design parameters. Within 120 days of the completion of the final RCFA on Tank S-103, Sabine must evaluate Tanks S-102, Tank S-104, Tank S-105 and their associated Tank Systems, considering the findings of the RCFA. Sabine must provide a copy of that evaluation to the Director. 16. Qualified Independent Third-Parties. Sabine must continue to engage the services of qualified independent third-parties to assist in the development and performance of the Tank S-103 Work Plan and the Tank S-101 Work Plan, except as otherwise specifically noted in this Agreement and Order. Sabine must submit to the Director for prior concurrence the names and qualifications of any proposed third-party experts that have not yet been approved. The third parties performing the work identified in the Work Plans must provide all reports to the Director at the same time as they are provided to Sabine. 17. Request for Information of Prior Known Events. Not later than July 31, 2018, Sabine must provide the Director with information regarding all previous known events in which any of Sabine's Tanks or Tank Systems at the Facility were operated outside of temperature design specifications. This information must include a description of the conditions that existed at the time of each event, any actions taken to mitigate each event, all inspections and assessments that were performed to ensure the integrity of the tanks after each event, and all modifications that were made to prevent future exceedances or incidents. 18. Monthly Reporting. Sabine must submit monthly reports to the Director that: (1) include all available data and results of the testing and evaluations required by this Agreement and Order; (2) describe the progress of the repairs or other remedial actions being undertaken; and (3) provide information on all other activities being undertaken pursuant to this Agreement and Order. Sabine submitted its first monthly report on April 16, 2018. Sabine must continue to submit monthly reports on the 15th of every month until the completion of the work plans derived from the RCFA. The Director may change the interval for the submission of these reports. III. Approvals 19. With respect to each submission under this Agreement and Order requiring the approval of the Director, the Director shall act promptly to: (a) approve, in whole or part, the submission; (b) approve the submission on specified conditions; (c) disapprove, in whole or in part, the submission, directing that Sabine modify the submission; or (d) any combination of the above. In the event of approval or approval upon conditions, Respondent will proceed to take all action required by the submission, as approved or conditioned by the Director. If the Director#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 7CPF No. 4-2018-3001H Page 6 conditions or disapproves all or any portion of a submission, the Director shall in writing state with specificity the basis for the decision and Respondent will resubmit it to address the stated issues. If a resubmitted item is disapproved in whole or in part, the Director may again require Respondent to address the stated issues in accordance with the foregoing procedure, and the Parties may proceed to dispute resolution according to Section VI below. IV. Document Production 20. To expedite the review and assessment of relevant documentation, Sabine must produce electronic versions (in their original format) of any and all records requested by the Director and/or submitted pursuant to this Agreement and Order via electronic communications or in a physical medium, such CD-ROM, DVD, or flash drive, unless specifically asked to do otherwise. If Sabine asserts a claim of business confidentiality or other protections applicable to the release of information by PHMSA, Sabine must mark such documents as confidential as provided in Paragraph 25 below. Since the Federal Energy Regulatory Commission (FERC) and PHMSA both have jurisdiction over the Facility and are coordinating with respect to the matters addressed in this Agreement and Order, Sabine must provide all such records to FERC simultaneously as they are provided to PHMSA. V. Extensions of Time 21. The Director may grant an extension of time for compliance with any of the terms of this Agreement and Order upon a written request submitted at least 15 days prior to a stated deadline, demonstrating good cause for an extension. VI. Dispute Resolution 22. The Director and Sabine will attempt to resolve informally any disputes arising under this Agreement and Order. The Director and Sabine will first confer in an effort to resolve any dispute. If the Director and Sabine are unable to resolve informally the dispute within 10 calendar days, Sabine may request in writing, within 10 days, a written determination resolving the dispute by the Associate Administrator for Pipeline Safety, PHMSA. Along with its request, Sabine will provide the Associate Administrator with all information Sabine believes is relevant to the dispute. If the request is submitted as provided herein, the Associate Administrator will promptly issue a written determination that shall be final. The existence of a dispute and PHMSA’s consideration of matters placed in dispute shall not excuse, toll, or suspend any term or timeframe for completion of any work to be performed under this Agreement and Order during the pendency of the dispute resolution process, except as agreed by the Director or the Associate Administrator in writing. VII. Enforcement 23. This Agreement and Order may be enforced by PHMSA pursuant to enforcement authorities available to the PHMSA under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190. All deadlines set forth or referenced in Section V will be automatically incorporated into this Agreement and Order and are enforceable in the same manner.#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 8CPF No. 4-2018-3001H Page 7 VIII. Recordkeeping and Information Disclosure 24. Except as otherwise provided herein, Sabine agrees to maintain records demonstrating compliance with all requirements of this Agreement and Order for a period of at least five years following completion of all work to be performed. 25. For any reports, plans, or other deliverables required to be submitted to PHMSA pursuant to this Agreement and Order, Respondent may assert a claim of business confidentiality or other protections applicable to the release of information by PHMSA, covering part or all of the information required to be submitted to PHMSA pursuant to this Agreement and Order in accordance with 49 C.F.R. Part 7 and 49 C.F.R. § 190.343. Respondent must mark the claim of confidentiality in writing on each page, and include a statement specifying the grounds for each claim of confidentially. PHMSA will determine the release of any information submitted pursuant to this Agreement and Order in accordance with 49 C.F.R. Part 7, the Freedom of Information Act, 5 U.S.C. § 552, DOT and PHMSA policies, and other applicable regulations and Executive Orders. IX. Effective Date 26. The term “Effective Date,” as used herein, is the date on which this Agreement and Order is fully executed by the Parties. Unless specified to the contrary, all deadlines for actions required by this Agreement and Order run from the Effective Date. X. Modification 27. The terms of this Agreement and Order may be modified by mutual agreement of the Parties. Such modifications must be in writing and signed by both parties. XI. Termination 28. This Agreement and Order terminates upon completion of Paragraph 24 and all Corrective Measures, as determined by the Director. Sabine may request written confirmation from PHMSA when this Agreement and Order is terminated and the Director will provide such confirmation. Nothing in this Agreement and Order prevents Respondent from completing any of the obligations earlier than the deadlines provided for in this Agreement and Order. XII. Ratification 29. The Parties’ undersigned representatives certify that they are fully authorized to enter into the terms and conditions of this Agreement and Order and to execute and legally bind such party to this document. 30. The Parties hereby agree to all conditions and terms of this Agreement and Order.#

420183001H_PHC Consent Agreement And Order_04202018_text.pdf, page 9CPF No. 4-2018-3001H Page 8 For Sabine Pass Liquefaction, LLC, as subsidiary of Cheniere Energy Partners, LP (Respondent): ___________________________________ President ________________________ Date For PHMSA: ___________________________________ Alan K. Mayberry Associate Administrator for Pipeline Safety Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation ________________________ Date#