EL PASO NATURAL GAS CO — Notice of Probable Violation

party submissionOfficial PDF420191010_Operator Response to Notice_12192019.pdf#

420191010_Closure Letter_10012020_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED October 1, 2020 Mr. Joseph E. McLaughlin Vice President of Operations Kinder Morgan, Inc 1001 Louisiana Street, Suite 1000 Houston, TX 77002 CPF 4-2019-1010 Dear Mr. McLaughlin: On July 22, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to El Paso Natural Gas Company, LLC, a Final Order in the above-referenced case that included a Compliance Order. On August 21, 2020, EPNG submitted its actions taken to complete the actions under the order. PHMSA has reviewed the records of evaluation for the applicability of Pipeline Safety regulations with regards to MAOP reconfirmation submitted in response to the Order and has determined the evaluation to be acceptable. Accordingly, this case is now closed and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Mary. L McDaniel, P.E Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#

420191010_Final Order_07222020_text.pdf, page 1Official PDFJuly 22, 2020 VIA ELECTRONIC MAIL TO: joe mclaughlin@kindermorgan.com Mr. Joseph E. McLaughlin Vice President of Operations Kinder Morgan, Inc. 1001 Louisiana Street, Suite 1000 Houston, Texas 77002 Re: CPF No. 4-2019-1010 Dear Mr. McLaughlin: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, El Paso Natural Gas Company, LLC. It makes findings of violation and assesses a civil penalty of $45,900. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated November 4, 2019. When the terms of the compliance order have been completed, as determined by the Director, Southwest Region, Office of Pipeline Safety, PHMSA, this enforcement action will be closed. Service of the Final Order by electronic mail is effective upon the date of transmission 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: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA Mr. Steven Kean, Chief Executive Officer, Kinder Morgan, steve_kean@kindermorgan.com Ms. Jessica Toll, Assistant General Counsel, Kinder Morgan, jessica_toll@kindermorgan.com Mr. Jamie Hernandez, Director - Engineering, Codes and Compliance, Kinder Morgan, jamie_hernandez@kindermorgan.com#

420191010_Final Order_07222020_text.pdf, page 2Ms. Catherine Little, Counsel, Troutman Sanders, LLP, catherine.little@troutman.com Ms. Annie Cook, Counsel, Troutman Sanders, LLP, annie.cook@troutman.com CONFIRMATION OF RECEIPT REQUESTED#

420191010_Final Order_07222020_text.pdf, page 3U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ____________________________________ In the Matter of ) ) ) El Paso Natural Gas Company, LLC, a subsidiary of Kinder Morgan, Inc., ) ) Respondent. ) ____________________________________) ) CPF No. 4-2019-1010 FINAL ORDER From January 16, 2018, through July 19, 2019, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) and Arizona Corporation Commission, pursuant to Chapter 601 of 49 United States Code, conducted an on-site pipeline safety inspection of the facilities and records of El Paso Natural Gas Company, LLC’s (EPNG or Respondent) West North pipeline system in Texas, Oklahoma, New Mexico, and Arizona. EPNG is a subsidiary of Kinder Morgan, Inc.1 The EPNG system is an approximately 10,140-mile pipeline system that transports natural gas from the San Juan, Permian, and Anadarko basins to California, Arizona, Nevada, New Mexico, Oklahoma, Texas, and northern Mexico.2 As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated October 1, 2019, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that EPNG had violated 49 C.F.R. §§ 192.619(a)(3) and 192.465(a), and proposed assessing a civil penalty of $45,900 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. The warning items required no further action, but warned the operator to correct the probable violations or face possible future enforcement action. EPNG requested and received two extensions of time to respond to the Notice. EPNG responded to the Notice by letter dated December 19, 2019 (Response). The company did not contest the allegation of § 192.619(a)(3), but provided additional information in response to the Notice and requested that the proposed compliance order be modified. The company did not contest the 1 Kinder Morgan, Inc. website, available at https://www.kindermorgan.com/pages/business/gas pipelines/west/EPNG MP/default.aspx (last accessed July 7, 2020). 2 Id.#

420191010_Final Order_07222020_text.pdf, page 4CPF No. 4-2019-1010 Page 2 allegation of § 192.465(a) and paid the proposed civil penalty. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(3), which states: § 192.619 Maximum allowable operating pressure: Steel or plastic pipelines. (a) No person may operate a segment of steel or plastic pipeline at a pressure that exceeds a maximum allowable operating pressure determined under paragraph (c) or (d) of this section, or the lowest of the following: (1) …. (3) The highest actual operating pressure to which the segment was subjected during the 5 years preceding the applicable date in the second column. This pressure restriction applies unless the segment was tested according to the requirements in paragraph (a)(2) of this section after the applicable date in the third column or the segment was uprated according to the requirements in subpart K of this part: Pipeline segment Pressure date Test date — Onshore gathering line that first became subject to this part (other than §192.612) after April 13, 2006 March 15, 2006, or date line becomes subject to this part, whichever is later 5 years preceding applicable date in second column. — Onshore transmission line that was a gathering line not subject to this part before March 15, 2006 Offshore gathering lines July 1, 1976 July 1, 1971. All other pipelines July 1, 1970 July 1, 1965. The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(3) by failing to establish a maximum allowable operating pressure (MAOP) for its MP 64+ 2964 to MP 138+ 2128 segment (the Segment). Specifically, the Notice alleged that EPNG did not have records to support its MAOP determination. The Notice alleged that EPNG’s records stated that the MAOP of the Segment was established using criteria in Section 3.3. of EPNG’s Operation and Maintenance Procedures 201, which adopted the requirements of § 192.619(a)(3). Yet, the Notice alleged EPNG could not provide records showing the highest actual operating pressure the Segment was subjected to during the five years preceding July 1, 1970, to support its MAOP determination in accordance with § 192.619(a)(3).3 3 The Notice mistakenly alleges that EPNG could not provide records showing the highest actual operating pressure that the Segment was subjected to during the past five years, instead of the five years preceding the applicable date of July 1, 1970.#

420191010_Final Order_07222020_text.pdf, page 5CPF No. 4-2019-1010 Page 3 In its Response, EPNG contended that it believed it had documents demonstrating compliance with § 192.619(a)(3) at the time of the inspection, but stated that it was not contesting the alleged violation. EPNG did request that the compliance order be modified, which is discussed below. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.619(a)(3) by failing to have documentation to support its MAOP determination for the Segment. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.465(a), which states: § 192.465 External corrosion control: Monitoring. (a) Each pipeline that is under cathodic protection must be tested at least one each calendar year, but with intervals not exceeding 15 months, to determine whether the cathodic protection meets the requirements of §192.463. However, if tests at those intervals are impractical for separately protected short sections of mains or transmission lines, not in excess of 100 feet (30 meters), or separately protected service lines, these pipelines may be surveyed on a sampling basis. At least 10 percent of these protected structures, distributed over the entire system must be surveyed each calendar year, with a different 10 percent checked each subsequent year, so that the entire system is tested in each 10-year period. The Notice alleged that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each pipeline that is under cathodic protection at least once each calendar year, but with intervals not exceeding 15 months, to determine whether the cathodic protection meets the requirements of § 192.463 for four of its pipeline systems.4 Specifically, the Notice alleged that EPNG’s records for its annual pipe-to-soil surveys for calendar years 2016 and 2017, for pipeline systems 1200, 1201, 1204, and 1208, showed that EPNG exceeded the 15-month testing interval by a period of one to five months. The Notice alleged further, that for pipeline system 1209, this is a repeat violation from a Final Order issued to Respondent on December 29, 2016 (CPF No. 4-2016- 1005, Item 4). Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each pipeline that is under cathodic protection at least once each calendar year, but with intervals not 4 §192.463 External corrosion control: Cathodic protection. (a) Each cathodic protection system required by this subpart must provide a level of cathodic protection that complies with one or more of the applicable criteria contained in appendix D of this part. If none of these criteria is applicable, the cathodic protection system must provide a level of cathodic protection at least equal to that provided by compliance with one or more of these criteria. (b) If amphoteric metals are included in a buried or submerged pipeline containing a metal of different anodic potential— (1) The amphoteric metals must be electrically isolated from the remainder of the pipeline and cathodically protected; or (2) The entire buried or submerged pipeline must be cathodically protected at a cathodic potential that meets the requirements of appendix D of this part for amphoteric metals. (c) The amount of cathodic protection must be controlled so as not to damage the protective coating or the pipe.#

420191010_Final Order_07222020_text.pdf, page 6CPF No. 4-2019-1010 Page 4 exceeding 15 months, to determine whether the cathodic protection meets the requirements of § 192.463 for four of its pipeline systems. These findings of violation will be considered prior offenses 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.5 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; 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 $45,900 for the violation of § 192.465(a) cited above. Item 3: The Notice proposed a civil penalty of $45,900 for Respondent’s violation of 49 C.F.R. § 192.465(a), for failing to test each pipeline that is under cathodic protection at least once each calendar year, but with intervals not exceeding 15 months, to determine whether the cathodic protection meets the requirements of § 192.463 for four of its pipeline systems. EPNG neither contested the allegation nor presented any evidence or argument justifying a reduction in or elimination of the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $45,900 for violation of 49 C.F.R. § 192.465(a). The full civil penalty amount was paid by wire transfer on November 4, 2019. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 for violation of 49 C.F.R. § 192.619(a)(3). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. With regard to the violation of § 192.619(a)(3) (Item 1), the Notice proposed to require that Respondent submit records showing the highest operating pressure to which the pipeline segment was operated during the five years preceding July 1, 1970. EPNG requested that the compliance terms be modified to permit Respondent to evaluate the applicability of recently issued pipeline safety regulations to ensure compliance with MAOP and recordkeeping standards. The new 5 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.#

420191010_Final Order_07222020_text.pdf, page 7CPF No. 4-2019-1010 Page 5 regulations, titled “Pipeline Safety: Safety of Gas Transmission Pipelines: MAOP Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments,” were promulgated by PHMSA on October 1, 2019 (84 FR 52180). In her recommendation for final action submitted pursuant to § 190.209(b)(7), the Regional Director agreed that it would be appropriate to modify the proposed compliance terms in order to allow EPNG to come into compliance with newly promulgated regulations concerning MAOP and recordkeeping. Therefore, the Compliance Order is modified as set forth below. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 192.619(a)(3) (Item 1), Respondent must evaluate the applicability of Pipeline Safety: Safety of Gas Transmission Pipelines: MAOP Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments, (84 FR 52180, Oct. 1, 2019) to the El Paso West North pipeline segment, MP 64 + 2964 and MP 138 + 2128. 2. EPNG must specifically evaluate the applicability of § 192.127, Records: Pipe Design (records verification); § 192.624, Maximum Allowable Operating Pressure Reconfirmation: Onshore Steel Transmission Pipelines (MAOP confirmation); § 192.632, Engineering Critical Assessment for Maximum Allowable Operating Pressure Reconfirmation: Onshore Steel Transmission Pipelines; and compliance timeframes in the October 1, 2019 rulemaking (effective July 1, 2020). 3. EPNG must provide its evaluation to the Director, Southwest Region for review within 30 days of the issuance of the Final Order. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. It is requested (not mandated) that Respondent maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. It is requested that these costs be reported in two categories: (1) total cost associated with preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with replacements, additions and other changes to pipeline infrastructure. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States.#

420191010_Final Order_07222020_text.pdf, page 8CPF No. 4-2019-1010 Page 6 WARNING ITEMS With respect to Items 2, 4, and 5, the Notice alleged probable violations of Parts 191 and 192, but identified them as warning items pursuant to § 190.205. The warnings were for: 49 C.F.R. § 191.5(a) (Item 2) ─ Respondent’s alleged failure to provide immediate notice at the earliest practical moment following discovery, but no later than one hour after confirmed discovery, of two incidents as defined in § 191.3. 49 C.F.R. § 192.739(a)(3) (Item 4) ─ Respondent’s alleged failure to correctly set the relief point on the relief device at Window Rock station, to control or relieve at the correct pressure, as required by § 192.201(a). 49 C.F.R. § 192.605(a) (Item 5) ─ Respondent’s alleged failure to follow its procedures to accurately record all required data on its form for annual on-site rectifier inspection in 12 instances. Pursuant to § 190.205, Respondent may submit a response to a warning, but is not required to. In addition, according to that regulation, an adjudication is not conducted for warnings to determine if a violation occurred. With regard to Item 2, EPNG requested the withdrawal of one of the referenced incidents because the regulatory requirements for § 191.5 were not in effect until after the incident occurred. Regarding Item 5, EPNG averred that it followed its procedures and that its procedures did not require the use or completion of the Impressed Current Rectifier and Anode Inspection Forms. Respondent’s position on Items 2 and 5 is noted for the record, but as indicated above, under § 190.205, PHMSA does not adjudicate warning items to determine whether a probable violation occurred. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the 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, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. July 22, 2020 Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

420191010_NOPV PCP PCO_10012019_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED October 1, 2019 Gary Buchler Vice President Engineering/Operations El Paso Natural Gas Company, L.L.C. 1001 Louisiana Street Houston, Texas 77002 - 5089 CPF 4-2019-1010 Dear Mr. Buchler: From January 16, 2018 through July 19, 2019, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) and Arizona Corporation Commission, pursuant to Chapter 601 of 49 United States Code inspected your El Paso West North pipeline system in Texas, Oklahoma, New Mexico, and Arizona. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violations are:#

420191010_NOPV PCP PCO_10012019_text.pdf, page 21. §192.619 Maximum allowable operating pressure - Steel or plastic pipelines. (a) No person may operate a segment of steel or plastic pipeline at a pressure that exceeds a maximum allowable operating pressure determined under paragraph (c) or (d) of this section, or the lowest of the following: (3) The highest actual operating pressure to which the segment was subjected during the 5 years preceding the applicable date in the second column. This pressure restriction applies unless the segment was tested according to the requirements in paragraph (a)(2) of this section after the applicable date in the third column or the segment was uprated according to the requirements in subpart K of this part: El Paso Natural Gas Company, L.L.C. (EPNG) failed to establish a maximum allowable operating pressure (MAOP) for one segment of the El Paso West North pipeline system in accordance with § 192.619. When deciding the MAOP to operate the MP 64 + 2964 to MP 138 + 2128 segment, EPNG chose to use the highest actual operating pressure the segment had been subjected to during the last 5 years, pursuant to § 192.619(a)(3). EPNG did, however, not have the documentation to support its determination. EPNG’s records show that the MAOP of the segment between MP 64 + 2964 and MP 138 + 2128 was established using the criteria in section 3.3 of EPNG’s Operation and Maintenance 201 procedures, which are the same as those in § 192.619(a)(3). EPNG, however, could not provide records showing the highest actual operating pressure that the segment was subjected to during the past 5 years. 2. § 191.5 Immediate notice of certain incidents. (a) At the earliest practicable moment following discovery, but no later than one hour after confirmed discovery, each operator must give notice in accordance with paragraph (b) of this section of each incident as defined in § 191.3. EPNG failed to provide immediate notice at the earliest practical moment following discovery (within one hour) of each of the following incidents as defined in §191.3: The first incident, involving a fire and release of natural gas, occurred at 8:00 am on January 10, 2017, on the L1600 Casa Grande to Wenden pipeline in Arizona. According to EPNG’s PHMSA Form F7100.2 (Report No. 20170017), EPNG discovered the incident at 10:00am on January 11, 2017, and reported it to the National Response Center (NRC) at 11:17am. The notification was made one hour and seventeen minutes following the confirmation of the need to report the incident. For the second incident, on July 9, 2017, at 4:50pm, EPNG notified the NRC of a 3:24pm incident involving the Florida B Staion in New Mexico. The incident resulted in the release of 500 MCF 2#

420191010_NOPV PCP PCO_10012019_text.pdf, page 3of natural gas. The NRC notification was made one hour and twenty-six minutes following discovery. 3. §192.465 External corrosion control: Monitoring. (a) Each pipeline that is under cathodic protection must be tested at least once each calendar year, but with intervals not exceeding 15 months, to determine whether the cathodic protection meets the requirements of §192.463. However, if tests at those intervals are impractical for separately protected short sections of mains or transmission lines, not in excess of 100 feet (30 meters), or separately protected service lines, these pipelines may be surveyed on a sampling basis. At least 10% of these protected structures, distributed over the entire system must be surveyed each calendar year, with a different 10% checked each subsequent year, so that the entire system is tested in each 10-year period. EPNG failed to test each pipeline that is under cathodic protection at least once each calendar year, but with intervals not exceeding 15 months to determine whether the cathodic protection met the requirements of § 192.463 for four of its pipeline systems. EPNG provided records for its annual pipe to soil surveys for calendar years 2016 and 2017 for pipeline systems 1200, 1201, 1204, and 1208. These records showed that EPNG failed to perform the annual surveys on those lines within the required 15 month interval. The survey records showed that the annual survey was carried out between March 8-14, 2016, while the subsequent survey did not occur until July 20-23, 2017, August 17, 2017, and November 29, 2017. In each instance, the 15 month interval was exceeding by a period of one to five months. For line 1208, this is a repeat violation from CPF 4-2016-1005 Item 4. 4. §192.739 - Pressure limiting and regulating stations: Inspection and testing. (a) Each pressure limiting station, relief device (except rupture discs), and pressure regulating station and its equipment must be subjected at intervals not exceeding 15 months, but at least once each calendar year, to inspections and tests to determine that it is- (3) Except as provided in paragraph (b) of this section, set to control or relieve at the correct pressure consistent with the pressure limits of §192.201(a); EPNG failed to correctly set the relief point on the relief device in order to control or relieve at the correct pressure as required by § 192.201(a) at the Window Rock station. PHMSA reviewed EPNG’s May 12, 2016, record that showed that the relief setting was set at 1000 psi, which is higher than the pressure limits set forth in 49 CFR §192.201(a). EPNG corrected the setting on January 19, 2017, to the correct set pressure of 900 psi. 3#

420191010_NOPV PCP PCO_10012019_text.pdf, page 45. §192.605 Procedural manual for operations, maintenance, and emergencies. (3) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least one each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. EPNG failed to follow its procedures to accurately record all required data on its annual on-site rectifier inspection in twelve instances. EPNG’s Operations and Maintenance procedures 903 (External Corrosion Control for Buried or Submerged Pipelines) and CorrBP-004 (Rectifier and Anode Bed Guide) require the completion of all the required information on its form to document its annual on-site rectifier inspections for twelve inspections. Records reviewed from various inspections carried out in 2017 were missing required information, including the nearest pipe to soil readings, AC volts/amps, anode readings, and some other required data. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015, 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. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $45,900 as follows: Item number PENALTY 3 $45,900 Warning Items With respect to items 2 , 4, and 5, we have reviewed the circumstances and supporting documents involved in this case and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to promptly correct these items. Failure to do so may result in additional enforcement action. 4#

420191010_NOPV PCP PCO_10012019_text.pdf, page 5Proposed Compliance Order With respect to item 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to El Paso Natural Gas Company, L.L.C. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. 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 you 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). Following the receipt of this Notice, you have 30 days to submit written comments, or request a hearing under 49 CFR § 190.211. 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. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. This period may be extended by written request for good cause. In your correspondence on this matter, please refer to CPF 4-2019-1010 and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Mary L. McDaniel, P.E. Director, Southwest Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 5#

420191010_NOPV PCP PCO_10012019_text.pdf, page 6PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to El Paso Natural Gas, L.L.C. (EPNG) a Compliance Order incorporating the following remedial requirements to ensure the compliance of EPNG with the pipeline safety regulations: 1. 2. 4. In regard to Item Number 1 of the Notice pertaining to MAOP determination EPNG shall submit records showing the highest operating pressure to which the MP 64 + 2964 to MP 138 + 2128 segment was operated during the 5 years preceding July 1, 1970. Records of the MAOP determination shall be submitted within 90 days of the issuance of the Final Order. It is requested (not mandated) that EPNG maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Mary. L. McDaniel P.E., Director, Southwest Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. 6#