{"operation":"document","citation":"CPF 420201002","title":"FREEPORT LNG DEVELOPMENT, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-01-27","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.605(a), 192.605(b)(8), 192.614(c)(1), 192.805(a), 192.805(b), 192.805(c), 192.805(d), 192.805(e), 192.805(f), 192.805(g), 192.805(h).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420201002.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420201002.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420201002","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420201002","body":"Notice of Probable Violation involving FREEPORT LNG DEVELOPMENT, L.P.. PHMSA's enforcement data identifies the cited regulations as 192.605(a),  192.605(b)(8),  192.614(c)(1),  192.805(a),  192.805(b),  192.805(c),  192.805(d),  192.805(e),  192.805(f),  192.805(g),  192.805(h). The case was opened on 2020-01-27 and is reported as closed as of 2020-10-14. Proposed civil penalty: $22,800. Assessed civil penalty: $22,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420201002_Closure Letter_10142020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Closure%20Letter_10142020.pdf\n\n420201002_Closure Letter_10142020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Closure%20Letter_10142020_text.pdf\n\n420201002_Final Order_07272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Final%20Order_07272020.pdf\n\n420201002_Final Order_07272020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Final%20Order_07272020_text.pdf\n\n420201002_NOPV PCP PCO_01272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_NOPV%20PCP%20PCO_01272020.pdf\n\n420201002_NOPV PCP PCO_01272020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_NOPV%20PCP%20PCO_01272020_text.pdf\n\n420201002_Operator Response to Notice_02182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Operator%20Response%20to%20Notice_02182020.pdf\n\n420201002_Final Order_07272020_text.pdf\n\nJuly 27, 2020\nVIA ELECTRONIC MAIL TO: scornelius@freeportlng.com\nMr. Sigmund Cornelius\nPresident and Chief Operating Officer\nFreeport LNG Development, LP\n333 Clay Street, Suite 5050\nHouston, Texas 77002\nRe: CPF No. 4-2020-1002\nDear Mr. Cornelius:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $22,800, and specifies actions that need to be taken by\nFreeport LNG Development, LP, to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Southwest Region, this\nenforcement action will be closed. Service of the Final Order by electronic mail is effective\nupon the date of transmission 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\nEnclosure\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Mark W. Mallett, P.E., Vice President of Operations and Engineering, Freeport LNG\nDevelopment, LP, mmallett@freeportlng.com\nMr. Michael Stephenson, Regulatory Compliance Manager, Freeport LNG Development,\nLP, mstephenson@freeportlng.com\nCONFIRMATION OF 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 )\n)\nFreeport LNG Development, LP, ) CPF No. 4-2020-1002\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom June 25, 2019, through September 26, 2019, pursuant to 49 U.S.C. § 60117,\nrepresentatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of Freeport LNG Development, LP (FLNG or Respondent) in Freeport, Texas. FLNG\noperates a 42-inch diameter natural gas transmission line located at the Freeport LNG facility in\nFreeport (Quintana), Texas.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated January 27, 2020, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nFLNG had committed three violations of 49 C.F.R. Part 192 and proposed assessing a civil\npenalty of $22,800 for one of the alleged violations. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violations. The warning item required\nno further action, but warned the operator to correct the probable violation or face possible future\nenforcement action.\nFLNG responded to the Notice by letter dated February 18, 2020 (Response). The company\ncontested one of the allegations of violation and requested that the proposed civil penalty be\nreduced. Respondent also submitted additional information regarding the proposed remedial\nmeasures set forth in the Proposed Compliance Order. Respondent did not request a hearing and\ntherefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\n1 Pipeline Safety Violation Report (Violation Report), at 1 (Jan. 28, 2020) (on file with PHMSA).\n\n\n\nCPF No. 4-2020-1002\nPage 2\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(8), which states:\n§ 192.605 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General . . .\n(b) Maintenance and normal operations. The manual required by\nparagraph (a) of this section must include procedures for the following, if\napplicable, to provide safety during maintenance and operations.\n(1) . . .\n(8) Periodically reviewing the work done by operator personnel to\ndetermine the effectiveness, and adequacy of the procedures used in normal\noperation and maintenance and modifying the procedures when deficiencies\nare found.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(8) by failing to establish\nwritten procedures to periodically review work done by its personnel to determine the\neffectiveness and adequacy of the procedures used in normal operation and maintenance, and to\nmodify the procedures when deficiencies are found. Specifically, the Notice alleged that\nFLNG’s Gas Pipeline Operations and Maintenance Manual (FLNG-GOM-100) did not include\nwritten procedures for the periodic review of the work performed by its personnel to evaluate the\neffectiveness and adequacy of its procedures.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.605(b)(8) by failing to have\nwritten procedures for the periodic review of work performed by its personnel to determine the\neffectiveness and adequacy of the company’s procedures, and to modify them when deficiencies\nare found.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.614(c)(1), which states:\n§ 192.614 Damage prevention program.\n(a) . . .\n(c) The damage prevention program required by paragraph (a) of this\nsection must, at a minimum:\n(1) Include the identity, on a current basis, of persons who normally\nengage in excavation activities in the area in which the pipeline is located.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.614(c)(1) by failing to have a\ndamage prevention program that included the current identity of persons who normally engage in\nexcavation activities in the area in which the pipeline is located. Specifically, the Notice alleged\nthat FLNG did not include the names of contractors or excavators from its “Third-Party Activity\nReports” into its damage prevention program.2\n2 During the PHMSA inspection, it was noted that several excavators called in to locate tickets, but were not placed\non the next mailing list to receive information about FLNG’s damage prevention program. Notice, at 3.\n\n\n\nCPF No. 4-2020-1002\nPage 3\nIn its Response, FLNG correctly noted that operators may comply with any of the requirements\nof § 192.614(c) through participation in a public service program, such as a one-call system.3\nSuch participation, however, does not relieve the operator of responsibility to comply with\n§ 192.614 requirements.4 Therefore, although FLNG participates in the Texas 811 program, a\nqualified one-call system, this does not relieve the company of its obligation under\n§ 192.614(c)(1) to identify persons who normally engage in excavation activities near its line in\nits damage prevention program.\nFLNG further stated in its Response that one of the excavators who was not identified in its\ndamage prevention program was also not identified by Texas 811 or its third-party public\nawareness contractor.5 Therefore, the company argued, this excavator may not be normally\nengaged in excavation activities in the area in which the pipeline is located.\nI disagree. All excavators perform critical safety work that carries the inherent risk of physical\ndamage to underground facilities. A single dig, performed in an unsafe manner, could result in\nproperty damage, personal injury, or even loss of life. Therefore, any time an individual is\nidentified as engaging in excavation activity, it is imperative that operators include them in their\ndamage prevention programs so that they can learn important safety information about\nexcavation damage and prevention. There is no threshold or minimum number of digs that\nexcavators must meet in order to be considered “normally engage[d] in excavation activities”\nunder § 192.614(c)(1). If excavators call in to locate dig tickets, like they did in this case, these\nindividuals are normally engaged in excavation activities near the pipeline for purposes of the\nregulation. Furthermore, FLNG did not provide any evidence showing that the excavator in\nquestion was not normally engaged in excavation activities in the area. Accordingly, based upon\na review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.614(c)(1) by\nfailing to have a damage prevention program that included the current identities of all persons\nwho normally engage in excavation activities near the pipeline.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states:\n§ 192.805 Qualification program.\nEach operator should have and follow a written qualification program.\nThe program shall include provisions to:\n(a)…\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to have a written\nqualification program to ensure through evaluation that individuals performing covered tasks are\nqualified. Specifically, the Notice alleged that FLNG’s written qualification program failed to\nensure through evaluation that employees were qualified to perform valve inspections. During\n3 See Response, at 3 (citing § 192.614(b)).\n4 Id.\n5 Id.\n\n\n\nCPF No. 4-2020-1002\nPage 4\nthe inspection, PHMSA discovered two FLNG employees with expired qualifications performed\nvalve inspections on regulated valves (BV-116, V20A08, and XV4345) a total of eight times\nfrom 2018-2019.6\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.805(b) by failing to have a\nwritten qualification program to ensure through evaluation that individuals performing covered\ntasks are qualified.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.7 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $22,800 for the violations cited above.\nItem 4: The Notice proposed a civil penalty of $22,800 for Respondent’s violation of 49 C.F.R.\n§ 192.805(b), for failing to have a written qualification program to ensure through evaluation that\nindividuals performing covered tasks are qualified. In its Response, FLNG noted that it\npromptly rectified the violation after it was discovered by PHMSA. Although this may be true,\nthe company’s post-inspection remedial measures do not negate the underlying violation and do\nnot serve as a basis to reduce a penalty under the Violation Report. Therefore, I see no reason to\nreduce the civil penalty amount based on the corrective measures FLNG enacted after the\nPHMSA inspection.\nThe company also stated that this was the first offense of this nature, and therefore the penalty\nshould be reduced. Again, the company’s enforcement record has already been taken into\nconsideration in calculating the proposed penalty. The Pipeline Safety Violation Report, which\nwas relied upon in this case to calculate the proposed civil penalty, accounts for enforcement\nhistory, and accurately noted that FLNG had no prior enforcement history over the past five\n6 The Notice alleged that FLNG failed to produce qualification records for these individuals. Notice, at 4.\n7 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 4-2020-1002\nPage 5\nyears, nor had it previously violated this particular regulation during the same time period.8\nTherefore, based upon all of the relevant circumstances, I find no reason to reduce the penalty\nbased on the fact that this is Respondent’s first violation.\nBased upon the foregoing, I assess Respondent a civil penalty of $22,800 for violation of\n49 C.F.R. § 192.805(b).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $22,800 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2 and 3 in the Notice for\nviolations of 49 C.F.R. §§ 192.805(b) and 192.614(c), respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of gas or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601.\nWith regard to the violation of § 192.805(b) (Item 2), Respondent submitted revised procedures\nfor the periodic review of work performed by its personnel to determine the effectiveness and\nadequacy of its procedures, and to modify them when deficiencies are found.9 In her Region\nRecommendation, the Director noted that FLNG would only initiate an effectiveness review if an\nemployee’s performance did not meet expectations. The requirement for periodic reviews,\nhowever, does not condition the review on employee performance. Therefore, I find that\nFLNG’s revised procedures do not sufficiently follow the requirements set forth in § 192.805(b).\n8 Violation Report, at 3, 29. PHMSA’s statute of limitations is five years pursuant to 28 U.S.C. § 2462.\n9 See Response, at 2-3 (including proposed revised procedures that state: “Work done by FLNG personnel shall be\nmonitored on a ‘management-by-exception’ basis by supervisors to confirm the effectiveness and adequacy of the\nprocedures used in normal operation and maintenance. ‘Management-by-exception’ means that if an employee’s\nperformance does not meet expectations, the underlying procedures should be evaluated as a possible cause of\nsubstandard employee performance. Procedures shall be modified when deficiencies are found. Such changes shall\nbe documented using the Management of Change (MOC) process.”).\n\n\n\nCPF No. 4-2020-1002\nPage 6\nWith regard to the violation of § 192.614(c) (Item 3), Respondent submitted additional\ninformation to PHMSA regarding actions it had taken to correct the noncompliance.10 The\ncompany, however, did not submit revised procedures as set forth in the Proposed Compliance\nOrder.\nFor the above reasons, the Compliance Order is not modified as set forth below.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 192.805(b) (Item 2), Respondent must develop a\nwritten procedure for periodic review that is not conditioned upon employee\nperformance and submit the revised procedure to the Director within 60 days of\nissuance of the Final Order; and\n2. With respect to the violation of § 192.614(c) (Item 3), Respondent must develop a\nwritten procedure to ensure that the current identity of persons who normally engage\nin excavation activities in the area in which its pipeline is located are identified as\nrequired and submit that procedure to the Director within 60 days of issuance of the\nFinal Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: (1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEM\nWith respect to Item 1, the Notice alleged a probable violation of Part 192, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n10 See Response, at 3 (noting that FLNG provided its third-party public awareness contractor with excavator name(s)\nand requested that it review the last three calendar years of dig tickets and perform a cross-check of identified entities\nto identify any potential gaps).\n\n\n\nCPF No. 4-2020-1002\nPage 7\n49 C.F.R. § 192.605(b) (Item 1) ─ Respondent’s alleged failure to conduct annual\nreviews of its manual as required by FLNG’s Gas Pipeline Operations and\nMaintenance Manual (FLNG-GOM-100).\nFLNG presented information in its Response showing it had complied with the requirement, as\nwell as information showing that it had taken certain actions to address the cited item. Under\n§ 190.205, PHMSA does not adjudicate warning items to determine whether a probable violation\noccurred. If OPS finds a violation of this provision in a subsequent inspection, Respondent may\nbe subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJuly 27, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420201002_NOPV PCP PCO_01272020_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 27, 2020\nMichael S. Smith\nChairman & CEO\nFreeport LNG Development, L.P.\n333 Clay Street, Suite 5050\nHouston, Texas 77002\nCPF 4-2020-1002\nDear Mr. Smith:\nFrom June 25 through September 26, 2019, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code (U.S.C.) inspected Freeport LNG Development, L.P.’s (FLNG)\npipeline system procedures, records, and facilities located in Freeport, Texas.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. § 192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline, a manual of\nwritten procedures for conducting operations and maintenance activities and for\n\n\n\nemergency response. For transmission lines, the manual must also include procedures\nfor handling abnormal operations. This manual must be reviewed and updated by the\noperator at intervals not exceeding 15 months, but at least once each calendar year.\nThis manual must be prepared before operations of a pipeline system commence.\nAppropriate parts of the manual must be kept at locations where operations and\nmaintenance activities are conducted.\nFLNG failed to follow, for each pipeline, a manual of written procedures for conducting\noperations and maintenance activities, and for emergency response. FLNG failed to\nprovide documentation showing that annual reviews of its gas transmission pipeline system\nas required by FLNG-GOM-100, Gas Pipeline Operations and Maintenance Manual were\nperformed.\nFLNG-GOM-100, Gas Pipeline Operations and Maintenance Manual, requires annual\nreviews. According to FLNG, it conducted its reviews annually for the past three\nyears; however, no documentation was provided during the inspection to document the\nannual review.\nFLNG failed to use the log referred to in the procedure to document that there were no\nchanges to the manual when the annual review was conducted. The last review date listed\non the manual was 12/10/2018 is shown on each page.\n2. §192.605 Procedural manual for operations, maintenance, and emergencies.\n(b) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following, if applicable, to provide safety\nduring maintenance and operations.\n(8) Periodically reviewing the work done by operator personnel to determine the\neffectiveness, and adequacy of the procedures used in normal operation and\nmaintenance and modifying the procedures when deficiencies are found.\nFLNG failed to establish written procedures for the periodic review of the work done by\noperator personnel to determine the effectiveness, and adequacy of the procedures used in\nnormal operation and maintenance in accordance with § 192.605(b)(8).\nPHMSA reviewed FLNG’s FLNG-GOM-100, Gas Pipeline Operations and Maintenance\nManual, and noted that the manual did not include procedures for the periodic review of\nthe work performed by operator personnel. Because it did not conduct the periodic\nreviews, FLNG could not use those reviews to evaluate the effectiveness and adequacy of\nits procedures.\n3. § 192.614 Damage prevention program.\n2\n\n\n\n(c) The damage prevention program required by paragraph (a) of this section must,\nat a minimum:\n(1) Include the identity, on a current basis, of persons who normally engage in\nexcavation activities in the area in which the pipeline is located.\nFLNG’s damage prevention program did not include the identity, on a current basis, of\npersons who normally engage in excavation activities in the area in which its pipeline is\nlocated as required by §192.614(c)(1). Specifically, FLNG does not incorporate the names\nof associated contractors or excavators from its Third-Party Activity reports into its damage\nprevention program so that the names are included in the mail-outs and communications\nwith excavators along the system.\nDuring the PHMSA inspection, it was noted that several excavators had called into locate\ntickets, but were not put on the next mailing list to receive communication from the\noperator. One example is the excavator, Primoris Pipeline Services (Ticket No.\n1884060433). The date of ticket was December 8, 2018, and this excavator was not found\non the 2019 mailing list.\n4. §192.805 Qualification program.\nEach operator shall have and follow a written qualification program. The program\nshall include provisions to:\n(a) Identify covered tasks;\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified;\n(c) Allow individuals that are not qualified pursuant to this subpart to perform a\ncovered task if directed and observed by an individual that is qualified;\n(d) Evaluate an individual if the operator has reason to believe that the individual's\nperformance of a covered task contributed to an incident as defined in Part 191;\n(e) Evaluate an individual if the operator has reason to believe that the individual is\nno longer qualified to perform a covered task;\n(f) Communicate changes that affect covered tasks to individuals performing those\ncovered tasks;\n(g) Identify those covered tasks and the intervals at which evaluation of the\nindividual's qualifications is needed;\n(h) After December 16, 2004, provide training, as appropriate, to ensure that\nindividuals performing covered tasks have the necessary knowledge and skills to\nperform the tasks in a manner that ensures the safe operation of pipeline\nfacilities…\nFLNG failed to ensure through evaluation that employees were qualified to perform valve\n3\n\n\n\ninspections on eight separate occasions in 2018 and 2019.\nDuring the inspection, FLNG operator qualification records of employees performing\nvalve inspections were reviewed. Valve Inspection records showed that two FLNG\nemployees with expired qualifications performed valve inspections on regulated\nvalves (BV-116, V20A08, and XV4345) on its 42-inch pipeline on eight separate\noccasions in 2018 and 2019. At the time of the inspection, FLNG failed to provide\ndocumentation indicating these two individuals were qualified while performing the\ncovered tasks.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related\nseries of violations. For violation occurring on or after November 27, 2018 and before July 31,\n2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum\npenalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before\nNovember 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a\nmaximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015,\nthe maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty\nnot to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed\nthe circumstances and supporting documentation involved in the above probable violation and has\nrecommended that you be preliminarily assessed a civil penalty of $22,800 as follows:\nItem number PENALTY\n4 $ 22,800\nWarning Items\nWith respect to Item 1 we have reviewed the circumstances and supporting documents involved\nin this case and have decided not to conduct additional enforcement action or penalty assessment\nproceedings at this time. We advise you to promptly correct this item. Failure to do so may result\nin additional enforcement action.\nProposed Compliance Order\nWith respect to items 2 and 3 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials\nSafety Administration proposes to issue a Compliance Order to Freeport LNG Development, L. P.\n(FLNG). Please refer to the Proposed Compliance Order, which is enclosed and made a part of\nthis Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If you\n4\n\n\n\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. 552(b), along with the complete original document you must provide a second copy of the\ndocument with the portions you believe qualify for confidential treatment redacted and an\nexplanation of why you believe the redacted information qualifies for confidential treatment under\n5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request a\nhearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order. If you are responding to this Notice, we propose that you\nsubmit your correspondence to my office within 30 days from receipt of this Notice. This period\nmay be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 4-2020-1002 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\ncc: Mark Mallett, Vice President of Operations & Engineering, Freeport LNG Development, L.P.,\n333 Clay Street, Suite 5050, Houston, Texas 77002\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n5\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Freeport LNG Development, L.P., (FLNG) a\nCompliance Order incorporating the following remedial requirements to ensure the compliance of\nFLNG with the pipeline safety regulations:\n1. 2. In regard to Item Number 2 of the Notice pertaining to establishing written\nprocedures for the periodic review of the work done by operator personnel to\ndetermine the effectiveness, and adequacy of the processes used in normal\noperations and maintenance and modifying the processes when deficiencies are\nfound, FLNG must develop written procedures and complete the periodic review\nand submit documentation to PHMSA’s Southwest Region Director within 60 days\nof issuance of the Final Order.\nIn regard to Item Number 3 of the Notice pertaining to failing to ensure that the\nidentity of persons who normally engage in excavation are identified as required\nFLNG must develop a written procedure and submit that procedure to PHMSA’s\nSouthwest Region Director within 60 days of issuance of the Final Order.\nIt is requested (not mandated) that Freeport LNG Development, L. P. maintain documentation of\nthe safety improvement costs associated with fulfilling this Compliance Order and submit the total\nto the Director, Southwest Region, Pipeline and Hazardous Materials Safety Administration. It is\nrequested that these costs be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n6\n\n420201002_Closure Letter_10142020_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nOctober 14, 2020\nMichael S. Smith\nChairman & CEO\nFreeport LNG Development, L.P.\n333 Clay Street, Suite 5050\nHouston, Texas 77002\nCPF 4-2020-1002\nDear Mr. Smith:\nOn July 27, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Freeport LNG Development, L.P. (FLNG) a Final Order in the above-referenced case. This\nFinal Order included a Compliance Order and a Civil Penalty assessment. Based on our review of\nthe documentation provided and confirmation of payment of the Civil Penalty, it has been\ndetermined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":34103}