{"operation":"document","citation":"CPF 420193002S","title":"FREEPORT LNG DEVELOPMENT, L.P. — Safety Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-08-29","effective_on":null,"summary":"CLOSED safety order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420193002s.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420193002s.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420193002s","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420193002S","body":"Safety Order involving FREEPORT LNG DEVELOPMENT, L.P.. The dataset does not identify a cited regulation for this case. The case was opened on 2019-08-29 and is reported as closed as of 2023-03-10. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420193002S_Closure Letter_03102023_(15-150389S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Closure%20Letter_03102023_(15-150389S).pdf\n\n420193002S_Closure Letter_03102023_(15-150389S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Closure%20Letter_03102023_(15-150389S)_text.pdf\n\n420193002S_Consent Order and  Agreement_02142020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Consent%20Order%20and%20%20Agreement_02142020.pdf\n\n420193002S_Consent Order and  Agreement_02142020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Consent%20Order%20and%20%20Agreement_02142020_text.pdf\n\n420193002S_Notice of Proposed Safety Order_08292019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Notice%20of%20Proposed%20Safety%20Order_08292019.pdf\n\n420193002S_Notice of Proposed Safety Order_08292019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420193002S/420193002S_Notice%20of%20Proposed%20Safety%20Order_08292019_text.pdf\n\n420193002S_Consent Order and  Agreement_02142020_text.pdf\n\nFebruary 14, 2020\nMr. Michael S. Smith\nChairman and Chief Executive Officer\nFreeport LNG Development, LP\n333 Clay Street\nSuite 5050\nHouston, Texas 77002\nRe: CPF No. 4-2019-3002S\nDear Mr. Smith:\nEnclosed please find the Consent Order issued in the above-reference case, incorporating the\nterms of the fully executed Consent Agreement that resolves the issues underlying the Notice of\nProposed Safety Order issued by PHMSA on August 27, 2019. Your receipt of this Consent\nOrder constitutes service, as 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\nEnclosures (Consent Agreement and Order)\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Shaw C. Ottis, Vice President and Deputy General Counsel, Freeport LNG\nDevelopment, LP, 333 Clay Street, Suite 5050, Houston, Texas 77002\nMr. Mark W. Mallett, Senior Vice President – Operations and Projects, Freeport LNG\nDevelopment, LP, 333 Clay Street, Suite 5050, Houston, Texas 77002\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nFreeport LNG Development, LP, ) CPF No. 4-2019-3002S\n)\n)\n)\nRespondent )\n____________________________________)\nCONSENT ORDER\nBy letter dated August 29, 2019, the Pipeline and Hazardous Materials Safety Administration,\nOffice of Pipeline Safety, issued a Notice of Proposed Safety Order (Notice) to Freeport LNG\nDevelopment, LP (FLNG).\nIn response to the Notice, Respondent requested an informal consultation, whereupon the parties\nengaged in good-faith settlement discussions that have resulted in the Consent Agreement attached\nto this Order that settles all of the allegations in the Notice.\nAccordingly, the Consent Agreement is hereby approved and incorporated by reference into this\nOrder. FLNG is hereby ordered to comply with the terms of the Consent Agreement, effective\nimmediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties as set forth in 49 C.F.R. § 190.223.\nThe terms and conditions of this Consent Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nFebruary 14, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY\nADMINISTRATION\n)\nIn the Matter of )\n)\nFreeport LNG Development, L.P., ) CPF No. 4-2019-3002S\n)\nRespondent )\n)\nCONSENT AGREEMENT\nOn August 29, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nSouthwest Region, issued a Notice of Proposed Safety Order (Notice) to Freeport LNG\nDevelopment, L.P. (Respondent), which operates a natural gas liquefaction and export facility on\nQuintana Island, Texas (the Export Facility). The Notice was issued after an August 1, 2019,\nincident at the Export Facility in which Respondent was performing a cool down operation as part\nof the steps to commission Train 1. Respondent experienced a failure when attempting to reduce\nthe time required to properly cool down the facility. FLNG flowed high pressure chilled natural gas\nat approximately 917 pounds per share inch (psig) through bypass piping into 6” piping designed for\na maximum operating pressure of 90 psig. The 6” line consequently failed near the branch weld that\njoined it with the bypass piping, which resulted in an unintended release of natural gas.\nThe Notice alleged that conditions exist at Respondent’s Export Facility that might pose an integrity\nrisk to public safety, property, or the environment. The Notice also proposed that Respondent take\ncertain corrective measures to remedy the alleged conditions and ensure that the public, property,\nand the environment were protected from the potential risk.\nRespondent responded to the Notice by timely submitting a written response and request for an\ninformal consultation. An informal consultation was held on October 17, 2019.\nAs a result of the informal consultation, PHMSA and Respondent agreed that settlement of this\nproceeding will avoid further administrative proceedings or litigation of this Notice and that entry\ninto a Consent Agreement is the most appropriate means of addressing the alleged conditions raised\nin the Notice and is in the public interest. Therefore, pursuant to 49 C.F.R. Part 190, without\nadjudication of any issue of fact or law, and upon consent and agreement of Respondent and the\nPHMSA (the Parties), the Parties agree as follows:\nI. General Provisions\n1. Respondent acknowledges that as the operator of the Export Facility, Respondent\nand the Export Facility are subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C.\n§ 60101 et seq. and the regulations and administrative orders issued thereunder. For purposes of this\n\n\n\nConsent Agreement, Respondent acknowledges that it received proper notice of the PHMSA’s\naction in this proceeding and that the Notice states claims upon which relief may be granted pursuant\nto 49 U.S.C. § 60101 et seq. and the regulations and orders issued thereunder.\n2. Respondent does not admit or deny any of the alleged conditions or risks identified\nin the Notice but agrees, for purposes of this Consent Agreement, to address the alleged conditions\nand risks identified in the Notice by completing the actions specified in Part II of this agreement\n(Corrective Measures) and to abide by the terms of this Consent Agreement. This Consent\nAgreement does not constitute a finding of violation of any Federal law or regulation and may not\nbe used in any civil or administrative proceeding of any kind as evidence or proof of any fact, fault\nor liability, or as evidence of the violation of any law, rule, regulation or requirement, except in a\nproceeding to enforce the provisions of this Consent Agreement.\n3. After Respondent returns this signed agreement, the PHMSA’s representative will\npresent it to the Associate Administrator for Pipeline Safety recommending that the Associate\nAdministrator adopt the terms of this agreement by issuing an administrative order (Consent Order)\nincorporating the terms of this Consent Agreement. The terms of this agreement constitute an offer\nof settlement until accepted by the Associate Administrator. Once accepted, the Associate\nAdministrator will issue a Consent Order incorporating the terms of the agreement.\n4. Respondent consents to the issuance of the Consent Order, and hereby waives any\nfurther procedural requirements with respect to its issuance. Respondent waives all the rights to\ncontest the adequacy of notice, or the validity of the Consent Order of this Consent Agreement,\nincluding all rights to administrative or judicial hearings or appeals, except as may be set forth herein.\n5. This Consent Agreement shall apply to and be binding upon the PHMSA, and upon\nRespondent, 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 Consent Agreement\nand any incorporated work plans and schedules to all of Respondent’s officers, employees, and\nagents whose duties might reasonably include compliance with this Consent Agreement.\n6. For all transfers of ownership or operating responsibility of Respondent’s Export\nFacility, Respondent shall provide a copy of this Consent Agreement to the prospective transferee\nat least 30 days prior to such transfer and simultaneously provide written notice of the prospective\ntransfer to the PHMSA Southwest Region Director (Director) who issued the Notice.\n7. This Consent Agreement constitutes the final, complete and exclusive agreement\nand understanding between the Parties with respect to the settlement embodied in this Consent\nAgreement, and resolves any claims that have been or could have been alleged regarding the events\nor circumstances described in the Notice. The Parties acknowledge that there are no representations,\nagreements, or understandings relating to the settlement other than those expressly contained in this\nConsent Agreement, except that the terms of this Consent Agreement may be construed by reference\nto the Notice.\n8. Nothing in this Consent Agreement affects or relieves Respondent of its\nresponsibility to comply with all applicable requirements of the Federal pipeline safety laws,\n\n\n\n49 U.S.C. § 60101 et seq., and the regulations and orders issued thereunder. Nothing in this Consent\nAgreement alters the PHMSA’s right of access, entry, inspection, and information gathering or,\nexcept with respect to the matters expressly settled under this Consent Agreement, the PHMSA’s\nauthority to bring enforcement actions against Respondent pursuant to the Federal pipeline safety\nlaws, the regulations and orders issued thereunder, or any other provision of Federal or State law.\n9. This Consent Agreement does not waive or modify any Federal, State, or local laws\nor regulations that are applicable to Respondent’s Export Facility. This Consent Agreement is not a\npermit, or a modification of any permit, under any Federal, State, local laws or regulations.\nRespondent remains responsible for achieving and maintaining compliance with all applicable\nFederal, State, and local laws, regulations and permits.\n10. This Consent Agreement does not create rights in, or grant any cause of action to,\nany third party not party to this Agreement. The U.S. Department of Transportation is not liable for\nany injuries or damages to persons or property arising from acts or omissions of Respondent or its\nofficers, employees, or agents carrying out the work required by this Consent Agreement.\nRespondent agrees to hold harmless the U.S. Department of Transportation, its officers, employees,\nagents and representatives from any and all causes of action arising from any acts or omissions of\nRespondent or its contractors in carrying out any work required by this Consent Agreement.\n11. by PHMSA.\nThe terminology “after the Agreement” shall mean after the Consent Order is issued\nII. Corrective Measures\n12. Upon issuance of the Consent Order, Respondent agrees to perform the Corrective\nMeasures set forth below.\n13. Procedures Evaluation. Within 30 days after the Agreement, Respondent shall\nsubmit, for approval by the Director, the name of the proposed third-party that FLNG intends to\nuse for the procedures evaluation. Within 60 days after receiving approval, Respondent shall\nevaluate, using the third-party, the current operations and maintenance manual and training\nrequirements associated with personnel responsible for operations within the newly constructed\nFLNG Export Terminal. The review must include whether the procedures have adequate details,\nsafety provisions, and instructions to properly implement the procedures. The evaluation must also\ninclude a determination that the roles and responsibilities of all personnel are clearly defined for\neach task and the level(s) of required approvals are clearly stated. The evaluation must also\nprescribe mandatory training requirements for the procedures and any re-training requirements that\nare needed as a result of the August 1, 2019 incident or revisions to the procedures that result from\nthe evaluation. After completion, the procedures evaluation must be submitted to the Director for\nreview and acceptance.\n14. Procedures Revisions. Within 90 days of completion of Item 13 and acceptance by\nthe Director, Respondent shall complete the procedures revisions and training identified by the\nevaluation and submit to the Director for review and acceptance.\n\n\n\n15. Complete Inventory. Within 30 days after the Agreement, Respondent shall submit\nto the Director (or designees of the PHMSA Southwest Region) a complete inventory of piping\ninstalled in the Export Facility using all Heat Numbers associated with failed 6-inch and 2-inch\npiping, including but not limited to Heat Number 301881, manufactured by Salzgitter Mannesmann\nStainless Tubes France. The documentation shall include, for each piping segment, P&ID’s\nshowing the locations of all identified piping, manufacturing specifications, lengths, diameters,\nwall thicknesses, and specified minimum yield strength (SMYS), intended service (e.g., natural\ngas, LNG, refrigerant), maximum design pressures, and normal operating pressures.\n16. Records Evaluation. Within 30 days after the Agreement, Respondent shall\nsubmit to the Director a tabulation showing results of an evaluation of materials properties of all\nHeat Numbers associated with the failed 6-inch and 2-inch piping, including but not limited to\nHeat Number 301881, manufactured by Salzgitter Mannesmann Stainless Tubes France SAS.\nThis evaluation shall include a review and tabulation of the shop fabrication and site installation\ndocumentation, including materials specifications, MTR data, NDE reports, PMI reports and\npressure test records.\n17. Remedial Work Plan. Within 90 days after completing Items 13, 14, 15, 16, 18\nand 19, FLNG must prepare and submit a Remedial Work Plan (RWP) to the Director for approval\nprior to commencing any work specified by the RWP. The remedial work plan must include\nactions to implement any actions and remedy any issues identified by Items 13, 14, 15, 16 and 19.\nThe RWP must also include actions to remedy any other Identified Risk Conditions determined\nby the failure analysis and/or internal investigation of the incident. This may include, but is not\nlimited to, removal of all substandard piping, fittings, and appurtenances. An Identified Risk\nCondition includes (1) performing any operation without an approved procedure; and (2) use of\npiping materials, fittings, and appurtenances that do not meet design specifications.\na. The Director may incrementally approve parts of the RWP without approving the\nentire RWP.\nb. Once approved by the Director, the approved RWP increments or entire RWP is\nconsidered incorporated by reference into this Safety Order or Consent\nAgreement.\nc. The RWP must specify the tests, inspections, assessments, evaluations, and\nremedial measures FLNG will use to verify the integrity of the piping material,\nfittings and appurtenances. It must address all known or suspected factors and\ncauses of the August 1, 2019 failure.\nd. The RWP must include provisions for the following:\n1. Integrate the results of the metallurgical testing, failure analysis, and other\ncorrective actions required by this Agreement with all relevant pre- existing\noperational and assessment data for the Identified Risk Condition. Pre-\nexisting operational data includes, but is not limited to, construction,\noperations, maintenance, testing, repairs, prior metallurgical analyses, and\nany third-party consultation information.\n2. Determine if conditions similar to those contributing to the failure on\nAugust 1, 2019, are likely to exist elsewhere within the Export Terminal.\n3. Conduct additional field tests, inspections, assessments, and/or evaluations\nto determine whether, and to what extent, the conditions associated with the\n\n\n\nfailure on August 1, 2019, are present elsewhere within the Export\nTerminal. At a minimum, this process must consider all failure causes and\nspecify the use of mechanical and metallurgical testing, pressure testing, or\nother tests, inspections, assessments, and evaluations appropriate for the\nfailure causes.\nNote: FLNG may use the results of previous tests, inspections, assessments,\nand evaluations if approved by the Director, provided the results ofthe tests,\ninspections, assessments, and evaluations are analyzed with regard to the\nfactors known or suspected to have caused the August 1, 2019, failure.\n4. Describe the inspection and repair criteria Respondent will use to\nprioritize, evaluate, and repair anomalies, imperfections, and other\nidentified integrity threats. Include a description of how any defects will\nbe graded and a schedule for repairs or replacement.\n5. Based on the known history and condition of affected piping and\ncomponents included in the Identified Risk Condition, describe the\nmethods Respondent will use to repair, replace, or take other corrective\nmeasures to remediate the conditions associated with the pipeline failure\non August 1, 2019, and to address other known integrity threats to the\npiping material, fittings and appurtenances. Any testing showing that any\npipes do not have the strength and mechanical properties represented by\nthe design specifications will require such piping be replaced, additional\ntesting in additional locations to confirm the piping not identified for\nremoval meets such design specifications, or other remediation of the\nnoncompliance to the satisfaction of the Director. The repair,\nreplacement, or other corrective measures must meet the criteria specified\nin Item 17(d)(4) above.\n6. Define and implement continuing long-term periodic testing and integrity\nverification measures to ensure the ongoing safe operation of the Export\nTerminal considering the results of the analyses, inspections, evaluations,\nand corrective measures undertaken pursuant to the Agreement.\ne. Include a proposed schedule for completion of the RWP.\nf. Respondent must revise the RWP as necessary to incorporate new information\nobtained during the failure investigation and remedial activities, to incorporate the\nresults of actions undertaken pursuant to this Agreement, and/or to incorporate\nmodifications required by the Director.\n1. Submit any plan revisions to the Director for prior approval.\n2. The Director may approve plan revisions incrementally.\ng. Implement the RWP as it is approved by the Director, including any\nrevisions to the plan.\n\n\n\n18. Mechanical and Metallurgical Testing Protocols. Within 30 days after\ncompleting Items 15 and 16 of this Agreement, FLNG must prepare and submit mechanical and\nmetallurgical testing protocols to the Director for approval prior to any sample removal or testing.\nAt a minimum, the protocols must include the following:\na. Procedures for the chain-of-custody for all parties handling, transporting or\notherwise taking possession of the piping sample to be tested, including\nRespondent, its contractors, transporters, consultants and the materials testing\nlaboratory\nb. Provisions for testing to be performed with PHMSA representative(s) present.\nRespondent must provide to the Director, the date, time and location of the\ntesting and confirm availability of PHMSA inspector to be present during\nremoval of test samples and mechanical/metallurgical testing.\nc. Visual and optical stereomicroscope examination, scanning electron microscope\n(SEM) examination, energy dispersive X-ray spectroscopy (EDS)\nmicroanalysis, metallographic examination, chemical composition analysis\nusing optical emission spectroscopy (OES), and mechanical testing via a\nlongitudinal full wall thickness tensile test, longitudinal and transverse Charpy\nV-notch (CVN) impact test and microhardness test.\nd. Destructive and non-destructive testing of both the pipe body material and\nassociated welds.\n19. Mechanical and Metallurgical Testing of Pipe Samples and Welds. Within 60\ndays after completing Item 18, Respondent shall perform additional mechanical and metallurgical\ntesting on a statistically significant number of specimens. The following will be performed as part\nof the additional testing:\na. b. c. d. e. Documentation of the chain-of-custody for all parties handling, transporting or\notherwise taking possession of the piping sample to be tested, including\nRespondent, its contractors, transporters, consultants and the materials testing\nlaboratory.\nPrior to the testing, the mechanical and metallurgical testing protocol shall be\napproved by the Director.\nPrior to the mechanical and metallurgical testing, provide the Director with the\nscheduled date, time and location of the testing to allow an opportunity for a\nPHMSA representative to witness the testing.\nPerformance of visual and optical stereomicroscope examination, non-destructive\nevaluation of welds, scanning electron microscope (SEM) examination, energy\ndispersive X-ray spectroscopy (EDS) microanalysis, metallographic examination,\nchemical composition analysis using optical emission spectroscopy (OES), and\nmechanical testing via a longitudinal full wall thickness tensile test, longitudinal\nand transverse Charpy V-notch (CVN) impact test and microhardness test.\nDistribution of all analysis and reports, whether draft or final and in their entirety,\nto the Director at the same time they are made available to Respondent.\n\n\n\n20. Verification of Safeguards. Within 30 days after the completion of all requirements\nin the RWP, Respondent shall submit to the Director a written summary of the revisions to the\napplicable cooldown procedures, P&ID’s, and evidence of implementation for the purpose of\ncreating procedural safeguards to prevent similar situations from occurring in the future.\n21. Consent Order Documentation Report (CODR). Respondent must create and\nsubmit on a monthly basis, a CODR. The intent is for the CODR to summarize all actions taken\nand documentation created in performing the requirements of the Consent Order. The CODR must\nalso identify any activities or documentation for the period reflected in previous report activities so\nthe status of each item in the Consent Order is reflected in each report. When the Respondent has\nconcluded all the required items in the Consent Order, it will submit a final CODR to the Director.\nThis will allow the Director to complete a thorough review of all actions taken by the Respondent\nwith regards to the Consent Order prior to approving the closure of the Consent Order.\n22. The Director may grant an extension of time for compliance with any of the terms\nof the Consent Agreement upon a written request timely submitted demonstrating good cause for\nan extension. The Director shall respond in writing to any such request.\n23. Respondent may appeal any decision of the Director to the Associate Administrator\nfor Pipeline Safety. Decisions of the Associate Administrator are final.\nIII. Review and Approval Process\n24. With respect to any submission under Part II of this Consent Agreement that requires\nthe approval of the Director, the Director may: (a) approve, in whole or in part, the submission, (b)\napprove the submission on specified conditions; (c) disapprove, in whole or in part, the submission,\nor (d) any combination of the foregoing. If the Director approves, approves in part, or approves with\nconditions, Respondent will take all actions as approved by the Director, subject to Respondent’s\nright to invoke the dispute resolution procedures in Section IV with respect to any conditions the\nDirector identifies. If the Director disapproves all or any portion of the submission, the Director will\nprovide Respondent with a written notice of the deficiencies. Respondent will correct all deficiencies\nwithin the time specified by the Director and resubmit it for approval.\nIV. Dispute Resolution\n25. The Director and Respondent will informally attempt to resolve any disputes arising\nunder this Consent Agreement. If Respondent and the Director are unable to informally resolve the\ndispute within 15 days, Respondent may request in writing, within 10 days, a written determination\nresolving the dispute from the Associate Administrator for Pipeline Safety providing all information\nthat Respondent believes is relevant to the dispute. If the request is submitted as provided herein,\nthe Associate Administrator will issue a final determination in writing. The existence of a dispute\nand the PHMSA’s consideration of matters placed in dispute will not excuse, toll, or suspend any\nterm or timeframe for completion of any work to be performed under this agreement during the\npendency of the dispute resolution process except as agreed by the Director or the Associate\nAdministrator in writing.\n\n\n\nV. Enforcement\n26. This Consent Agreement, as adopted by the Consent Order, is subject to all\nenforcement authorities available to the PHMSA under 49 U.S.C. § 60101 et seq. and 49 C.F.R. Part\n190.\nVI. Recordkeeping and Information Disclosure\n22. Unless otherwise required by this Consent Agreement, Respondent agrees to\nmaintain records demonstrating compliance with all requirements of this Consent Agreement for a\nperiod of at least 5 years following completion of all work to be performed. For any reports, plans\nor other deliverables required to be submitted to the PHMSA pursuant to this Consent Agreement,\nRespondent may assert a claim of business confidentiality or other protections applicable to the\nrelease of information by the PHMSA, covering part or all of the information required to be\nsubmitted to the PHMSA pursuant to this agreement in accordance with C.F.R. Part 7. Respondent\nmust mark the claim of confidentiality in writing on each page, and include a statement specifying\nthe grounds for each claim of confidentiality. The PHMSA determines release of any information\nsubmitted pursuant to this Consent Agreement in accordance with 49 C.F.R. Part 7, the Freedom of\nInformation Act, 5 U.S.C. § 552, DOT and/or the PHMSA policies, and other applicable regulations\nand Executive Orders.\nVII. Effective Date\n23. The “Effective Date” as used herein is the date on which the Consent Order is issued\nby the Associate Administrator incorporating the terms of this Agreement. Unless specified to the\ncontrary, all deadlines for actions required by this Consent Agreement run from the Effective Date\nof the Consent Order.\nVIII. Modification\n24. The terms of this Consent Agreement may be modified by mutual agreement of\nthe Parties. Such modifications must be in writing and signed by both parties.\nIX. Termination\n25. This Consent Agreement terminates upon completion of all terms set forth in Part\nII (Corrective Measures) as determined by the Director. Respondent may request written\nconfirmation from the PHMSA when this Consent Agreement is terminated and the Director will\nprovide such confirmation. Nothing in this Consent Agreement prevents Respondent from\ncompleting any of the obligations earlier than the deadlines provided for in this Agreement.\nX. Ratification\n26. The Parties’ undersigned representatives certify that they are fully authorized to\nenter into the terms and conditions of this Consent Agreement and to execute and legally bind such\n\n\n\nparty to this document.\n27. The Parties hereby agree to all conditions and terms of this Consent Agreement.\nFor Respondent:\n_______________________________\nMark Mallett, Senior Vice President, Operations & Projects\n_______________________________\nDate\nFor the PHMSA:\n_______________________________\nMary L. McDaniel, Director, Southwest Region\n_______________________________\nDate\n\n420193002S_Notice of Proposed Safety Order_08292019_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nAugust 29, 2019\nMichael S. Smith\nChairman & CEO\nFreeport LNG Development, L.P.\n333 Clay Street\nSuite 5050\nHouston, Texas 77002\nCPF 4-2019-3002S\nDear Mr. Smith:\nEnclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.\nThe Notice proposes that you take certain measures to ensure facility safety with respect to\nFreeport LNG Development, L.P.’s Export Facility located on Quintana Island, Texas. Your\noptions for responding are set forth in the Notice. Your receipt of the Notice constitutes service\nof that document under 49 C.F.R. § 190.5.\nWe look forward to a successful resolution to ensure liquefied natural gas facility safety.\nPlease direct any questions on this matter to me at (713) 272-2847.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Notice of Proposed Safety Order\ncc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS, PHMSA\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS, PHMSA\n\n\n\nMr. Mark Roscoe, FERC Regulatory Compliance and Warranty Manager, Freeport LNG\nDevelopment, L.P.\nMr. Michael Stephenson, Regulatory Compliance Superintendent, Freeport LNG\nDevelopment, L.P.\nMr. Mark Mallet, Vice President, Operations & Engineering, Freeport Development, L.P.\n2\n\n\n\n3\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\n____________________________________\nIn the Matter of )\nFreeport LNG Development, L.P., ) CPF No. 4-2019-3002S\n)\n)\n)\nRespondent )\n____________________________________)\nNOTICE OF PROPOSED SAFETY ORDER\nBackground and Purpose\nPursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials\nSafety Administration (PHMSA) has initiated an investigation of the safety of Freeport LNG\nDevelopment, L.P.’s (FLNG or Respondent) Quintana Island Export Facility following an\nAugust 1, 2019, unintended release of natural gas after a piping failure occurred during\ncommissioning.\nAs a result of the investigation, it appears that a condition exists on your liquefied natural gas\n(LNG) facility that poses a pipeline integrity risk to public safety, property, or the environment.\nPursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of Proposed Safety Order, notifying\nyou of the preliminary findings of the investigation, and proposing that you take measures to ensure\nthat the public, property, and the environment are protected from the potential risk.\nPreliminary Findings\n• The FLNG Export Facility is located on Quintana Island, Texas. The Export Facility\nincludes three parallel liquefaction trains (Trains 1, 2, and 3). Each train is capable of\nproducing approximately 4.4 million metric tons per annum of LNG for export, which\nequates to a total liquefaction capacity of approximately 1.8 billion cubic feet per day of\nnatural gas.\n• The FLNG Export Facility is located in a maritime region adjacent to the Gulf of Mexico,\nexperiences high humidity throughout a major portion of the year, and is subject to\ntropical storms and hurricanes. The land used to construct the FLNG Export Facility is\non Quintana Island separated from the main portion of Freeport, Texas by the Gulf\nIntracoastal Waterway (GIWW). The FLNG site is low-lying with little elevation\ndifference from the surrounding water and had to be stabilized prior to construction.\n\n\n\n4\n• The FLNG Export Facility is located within an ecologically sensitive area and is also\nnear recreational areas that include beaches and waterways used by the public.\nAdditionally, the facility is located on the GIWW. The GIWW stretches from St. Marks,\nFlorida to Brownsville, Texas. It is the nation’s third busiest waterway with the Texas\nportion handling over 58 percent of its traffic.\n• The 2010 U.S. Census reported Quintana, Texas had a population of 56. Freeport, Texas,\nwhich is just across the GIWW from Quintana, has a population of approximately 12,000\nresidents. Being on the Gulf of Mexico, the area also attracts recreational visitors and is\nclose to Surfside Beach and Bryan Beach State Park.\n• On August 1, 2019, FLNG was performing a cool down operation as part of the steps to\ncommission Train 1 of the newly constructed liquefaction facility. FLNG experienced a\nfailure when attempting to reduce the time required to properly cool down the facility.\nFLNG flowed high pressure chilled natural gas at approximately 917 pounds per square\ninch (psig) through bypass piping into piping designed for a maximum operating pressure\nof 90 psig. The bypass line consequently failed around the area where a branch weld\njoined the pipes. The failure of the bypass line resulted in an unintended release of natural\ngas.\n• FLNG was in the process of a cool down operation that was outside the design parameters\nof the system.\n• FLNG informed the Federal Energy Regulatory Commission (FERC) of the event the\nsame day, August 1, 2019. FERC notified PHMSA, Office of Pipeline Safety (OPS),\nSouthwest Region staff of the event on August 6, 2019. PHMSA began its initial onsite\ninvestigation on August 7, 2019. FLNG did not make notification of the incident to the\nNational Response Center.\n• FLNG’s preliminary investigation revealed that the piping was subjected to vibration as\na result of this operation. A third-party forensic laboratory analysis concluded that there\nwere potential issues with the characteristics of the weld and the failed segment of piping\nhad a “lean chemistry.” Samples tested for materials verification also indicated the\nultimate tensile strength was below the manufacturing standard for piping intended for\nservice subject to 49 CFR Part 193. The failed piping was manufactured by Salzgitter\nMannesmann Stainless Tubes (Salzgitter Mannesmann). PHMSA acquired\ndocumentation from FLNG indicating there may be approximately 1,408 feet of 6-inch\npiping from Salzgitter Mannesmann’s Heat Number associated with the failed piping\ninstalled at various locations throughout the FLNG facility\n• FLNG continues to operate the liquefaction train; the liquefaction facility may contain\nsimilarly flawed piping that does not meet design specifications.\n• The failed piping was seamless stainless-steel pipe manufactured to ASTM/ASME\nSA312 TP 304/304L Heat No: 301881; Manufactured by Salzgitter Mannesmann in\nMontbard, France.\n\n\n\n5\n• FLNG reported the incident resulted in a release of approximately 315,000 cubic feet of\nnatural gas.\n• FLNG provided PHMSA with a failure analysis report conducted by the third party\nforensic laboratory capturing the results of mechanical and chemical testing. The report\nfound the fracture surface exhibited signs of brittle fracture possibly indicating that the\nmaterial and/or weld did not possess the characteristics required for cryogenic service.\nProposed Issuance of Safety Order\nSection 60117(l) of Title 49, United States Code, provides for the issuance of a safety order, after\nreasonable notice and the opportunity for a hearing, requiring corrective measures, which may\ninclude physical inspection, testing, repair, or other actions, as appropriate. The basis for making\nthe determination that an LNG facility1 has a condition or conditions that pose a pipeline integrity\nrisk to public safety, property, or the environment is set forth both in the above-referenced statute\nand 49 C.F.R. § 190.239, a copy of which is enclosed.\nAfter evaluating the foregoing preliminary findings of fact and considering the hazardous nature\nof the product, the temperature and pressure conditions required by the process, the characteristics\nof the geographical area where the LNG facility is located, the circumstances that resulted in the\nfailure, and the likelihood that the issues could affect the safety of other areas of the LNG facility,\nit appears that continued operation of the affected LNG Facility without corrective measures may\npose an integrity risk to public safety, property, or the environment.\nAccordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the\nproposed issuance of a safety order and to propose that Respondent take measures specified herein\nto address the potential risk.\nResponse to this Notice\nIn accordance with § 190.239, you have 30 days following receipt of this Notice to submit a written\nresponse to the official who issued the Notice. If you do not respond within 30 days, this\nconstitutes a waiver of your right to contest this Notice and authorizes the Associate Administrator\nfor Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue\na Safety Order. In your response, you may notify that official that you intend to comply with the\nterms of the Notice as proposed, or you may request that an informal consultation be scheduled\n(you will also have the opportunity to request an administrative hearing before a safety order is\nissued). Informal consultation provides you with the opportunity to explain the circumstances\nassociated with the risk conditions alleged in the notice and, as appropriate, to present a proposal\nfor a work plan or other remedial measures, without prejudice to your position in any subsequent\nhearing. If you and PHMSA agree within 30 days of informal consultation on a plan and schedule\n1 Section 190.239 applies to “a particular pipeline facility [that] has a condition or conditions that pose a pipeline\nintegrity risk to public safety, property, or the environment.” An LNG facility is defined in § 193.2007 as “a\npipeline facility that is used for liquefying natural gas or synthetic gas or transferring, storing, or vaporizing\nliquefied natural gas.” Therefore, LNG facilities are subject to § 190.239.\n\n\n\n6\nfor you to address each Identified Risk Condition, we may enter into a written consent agreement\n(PHMSA would then issue an administrative consent order incorporating the terms of the\nagreement). If a consent agreement is not reached, or if you have elected not to request informal\nconsultation, you may request an administrative hearing in writing within 30 days following\nreceipt of the Notice or within 10 days following the conclusion of an informal consultation that\ndid not result in a consent agreement, as applicable. Following a hearing, if the Associate\nAdministrator finds the facility to have a condition that poses a pipeline integrity risk to the public,\nproperty, or the environment in accordance with § 190.239, the Associate Administrator may issue\na safety order\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 must\nprovide a second copy of the document with the portions you believe qualify for confidential\ntreatment redacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b).\nIn your correspondence on this matter, please refer to CPF 4-2019-3002S and for each document\nyou submit, please provide a copy in electronic format whenever possible.\nProposed Corrective Measures\nPursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to FLNG a\nsafety order incorporating the following remedial requirements with respect to its Export Facility\nlocated on Quintana Island, Texas:\n1. 2. Complete Invento","truncated":true,"body_characters":51351}