# FREEPORT LNG DEVELOPMENT, L.P. — Notice of Probable Violation

- **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:** Not available
- **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).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420201002.md
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- **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.

Official case documents:

420201002_Closure Letter_10142020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Closure%20Letter_10142020.pdf

420201002_Closure Letter_10142020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Closure%20Letter_10142020_text.pdf

420201002_Final Order_07272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Final%20Order_07272020.pdf

420201002_Final Order_07272020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Final%20Order_07272020_text.pdf

420201002_NOPV PCP PCO_01272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_NOPV%20PCP%20PCO_01272020.pdf

420201002_NOPV PCP PCO_01272020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_NOPV%20PCP%20PCO_01272020_text.pdf

420201002_Operator Response to Notice_02182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420201002/420201002_Operator%20Response%20to%20Notice_02182020.pdf

420201002_Final Order_07272020_text.pdf

July 27, 2020
VIA ELECTRONIC MAIL TO: scornelius@freeportlng.com
Mr. Sigmund Cornelius
President and Chief Operating Officer
Freeport LNG Development, LP
333 Clay Street, Suite 5050
Houston, Texas 77002
Re: CPF No. 4-2020-1002
Dear Mr. Cornelius:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $22,800, and specifies actions that need to be taken by
Freeport LNG Development, LP, to comply with the pipeline safety regulations. The penalty
payment terms are set forth in the Final Order. When the civil penalty has been paid and the
terms of the compliance order completed, as determined by the Director, Southwest Region, 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. Mark W. Mallett, P.E., Vice President of Operations and Engineering, Freeport LNG
Development, LP, mmallett@freeportlng.com
Mr. Michael Stephenson, Regulatory Compliance Manager, Freeport LNG Development,
LP, mstephenson@freeportlng.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
)
In the Matter of )
)
Freeport LNG Development, LP, ) CPF No. 4-2020-1002
)
Respondent. )
____________________________________)
FINAL ORDER
From June 25, 2019, through September 26, 2019, pursuant to 49 U.S.C. § 60117,
representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office
of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and
records of Freeport LNG Development, LP (FLNG or Respondent) in Freeport, Texas. FLNG
operates a 42-inch diameter natural gas transmission line located at the Freeport LNG facility in
Freeport (Quintana), Texas.1
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated January 27, 2020, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to
49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
FLNG had committed three violations of 49 C.F.R. Part 192 and proposed assessing a civil
penalty of $22,800 for one of the alleged violations. The Notice also proposed ordering
Respondent to take certain measures to correct the alleged violations. The warning item required
no further action, but warned the operator to correct the probable violation or face possible future
enforcement action.
FLNG responded to the Notice by letter dated February 18, 2020 (Response). The company
contested one of the allegations of violation and requested that the proposed civil penalty be
reduced. Respondent also submitted additional information regarding the proposed remedial
measures set forth in the Proposed Compliance Order. 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:
1 Pipeline Safety Violation Report (Violation Report), at 1 (Jan. 28, 2020) (on file with PHMSA).



CPF No. 4-2020-1002
Page 2
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(8), which states:
§ 192.605 Procedural manual for operations, maintenance, and
emergencies.
(a) General . . .
(b) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following, if
applicable, to provide safety during maintenance and operations.
(1) . . .
(8) Periodically reviewing the work done by operator personnel to
determine the effectiveness, and adequacy of the procedures used in normal
operation and maintenance and modifying the procedures when deficiencies
are found.
The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(8) by failing to establish
written procedures to periodically review work done by its personnel to determine the
effectiveness and adequacy of the procedures used in normal operation and maintenance, and to
modify the procedures when deficiencies are found. Specifically, the Notice alleged that
FLNG’s Gas Pipeline Operations and Maintenance Manual (FLNG-GOM-100) did not include
written procedures for the periodic review of the work performed by its personnel to evaluate the
effectiveness and adequacy of its procedures.
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. § 192.605(b)(8) by failing to have
written procedures for the periodic review of work performed by its personnel to determine the
effectiveness and adequacy of the company’s procedures, and to modify them when deficiencies
are found.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.614(c)(1), which states:
§ 192.614 Damage prevention program.
(a) . . .
(c) The damage prevention program required by paragraph (a) of this
section must, at a minimum:
(1) Include the identity, on a current basis, of persons who normally
engage in excavation activities in the area in which the pipeline is located.
The Notice alleged that Respondent violated 49 C.F.R. § 192.614(c)(1) by failing to have a
damage prevention program that included the current identity of persons who normally engage in
excavation activities in the area in which the pipeline is located. Specifically, the Notice alleged
that FLNG did not include the names of contractors or excavators from its “Third-Party Activity
Reports” into its damage prevention program.2
2 During the PHMSA inspection, it was noted that several excavators called in to locate tickets, but were not placed
on the next mailing list to receive information about FLNG’s damage prevention program. Notice, at 3.



CPF No. 4-2020-1002
Page 3
In its Response, FLNG correctly noted that operators may comply with any of the requirements
of § 192.614(c) through participation in a public service program, such as a one-call system.3
Such participation, however, does not relieve the operator of responsibility to comply with
§ 192.614 requirements.4 Therefore, although FLNG participates in the Texas 811 program, a
qualified one-call system, this does not relieve the company of its obligation under
§ 192.614(c)(1) to identify persons who normally engage in excavation activities near its line in
its damage prevention program.
FLNG further stated in its Response that one of the excavators who was not identified in its
damage prevention program was also not identified by Texas 811 or its third-party public
awareness contractor.5 Therefore, the company argued, this excavator may not be normally
engaged in excavation activities in the area in which the pipeline is located.
I disagree. All excavators perform critical safety work that carries the inherent risk of physical
damage to underground facilities. A single dig, performed in an unsafe manner, could result in
property damage, personal injury, or even loss of life. Therefore, any time an individual is
identified as engaging in excavation activity, it is imperative that operators include them in their
damage prevention programs so that they can learn important safety information about
excavation damage and prevention. There is no threshold or minimum number of digs that
excavators must meet in order to be considered “normally engage[d] in excavation activities”
under § 192.614(c)(1). If excavators call in to locate dig tickets, like they did in this case, these
individuals are normally engaged in excavation activities near the pipeline for purposes of the
regulation. Furthermore, FLNG did not provide any evidence showing that the excavator in
question was not normally engaged in excavation activities in the area. Accordingly, based upon
a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.614(c)(1) by
failing to have a damage prevention program that included the current identities of all persons
who normally engage in excavation activities near the pipeline.
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states:
§ 192.805 Qualification program.
Each operator should have and follow a written qualification program.
The program shall include provisions to:
(a)…
(b) Ensure through evaluation that individuals performing covered tasks
are qualified.
The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to have a written
qualification program to ensure through evaluation that individuals performing covered tasks are
qualified. Specifically, the Notice alleged that FLNG’s written qualification program failed to
ensure through evaluation that employees were qualified to perform valve inspections. During
3 See Response, at 3 (citing § 192.614(b)).
4 Id.
5 Id.



CPF No. 4-2020-1002
Page 4
the inspection, PHMSA discovered two FLNG employees with expired qualifications performed
valve inspections on regulated valves (BV-116, V20A08, and XV4345) a total of eight times
from 2018-2019.6
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. § 192.805(b) by failing to have a
written qualification program to ensure through evaluation that individuals performing covered
tasks are qualified.
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.7 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 $22,800 for the violations cited above.
Item 4: The Notice proposed a civil penalty of $22,800 for Respondent’s violation of 49 C.F.R.
§ 192.805(b), for failing to have a written qualification program to ensure through evaluation that
individuals performing covered tasks are qualified. In its Response, FLNG noted that it
promptly rectified the violation after it was discovered by PHMSA. Although this may be true,
the company’s post-inspection remedial measures do not negate the underlying violation and do
not serve as a basis to reduce a penalty under the Violation Report. Therefore, I see no reason to
reduce the civil penalty amount based on the corrective measures FLNG enacted after the
PHMSA inspection.
The company also stated that this was the first offense of this nature, and therefore the penalty
should be reduced. Again, the company’s enforcement record has already been taken into
consideration in calculating the proposed penalty. The Pipeline Safety Violation Report, which
was relied upon in this case to calculate the proposed civil penalty, accounts for enforcement
history, and accurately noted that FLNG had no prior enforcement history over the past five
6 The Notice alleged that FLNG failed to produce qualification records for these individuals. Notice, at 4.
7 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.



CPF No. 4-2020-1002
Page 5
years, nor had it previously violated this particular regulation during the same time period.8
Therefore, based upon all of the relevant circumstances, I find no reason to reduce the penalty
based on the fact that this is Respondent’s first violation.
Based upon the foregoing, I assess Respondent a civil penalty of $22,800 for violation of
49 C.F.R. § 192.805(b).
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.
The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $22,800 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 2 and 3 in the Notice for
violations of 49 C.F.R. §§ 192.805(b) and 192.614(c), respectively. 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 § 192.805(b) (Item 2), Respondent submitted revised procedures
for the periodic review of work performed by its personnel to determine the effectiveness and
adequacy of its procedures, and to modify them when deficiencies are found.9 In her Region
Recommendation, the Director noted that FLNG would only initiate an effectiveness review if an
employee’s performance did not meet expectations. The requirement for periodic reviews,
however, does not condition the review on employee performance. Therefore, I find that
FLNG’s revised procedures do not sufficiently follow the requirements set forth in § 192.805(b).
8 Violation Report, at 3, 29. PHMSA’s statute of limitations is five years pursuant to 28 U.S.C. § 2462.
9 See Response, at 2-3 (including proposed revised procedures that state: “Work done by FLNG personnel shall be
monitored on a ‘management-by-exception’ basis by supervisors to confirm the effectiveness and adequacy of the
procedures used in normal operation and maintenance. ‘Management-by-exception’ means that if an employee’s
performance does not meet expectations, the underlying procedures should be evaluated as a possible cause of
substandard employee performance. Procedures shall be modified when deficiencies are found. Such changes shall
be documented using the Management of Change (MOC) process.”).



CPF No. 4-2020-1002
Page 6
With regard to the violation of § 192.614(c) (Item 3), Respondent submitted additional
information to PHMSA regarding actions it had taken to correct the noncompliance.10 The
company, however, did not submit revised procedures as set forth in the Proposed Compliance
Order.
For the above reasons, the Compliance Order is not 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 § 192.805(b) (Item 2), Respondent must develop a
written procedure for periodic review that is not conditioned upon employee
performance and submit the revised procedure to the Director within 60 days of
issuance of the Final Order; and
2. With respect to the violation of § 192.614(c) (Item 3), Respondent must develop a
written procedure to ensure that the current identity of persons who normally engage
in excavation activities in the area in which its pipeline is located are identified as
required and submit that procedure to the Director within 60 days of 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.
WARNING ITEM
With respect to Item 1, the Notice alleged a probable violation of Part 192, but identified it as a
warning item pursuant to § 190.205. The warning was for:
10 See Response, at 3 (noting that FLNG provided its third-party public awareness contractor with excavator name(s)
and requested that it review the last three calendar years of dig tickets and perform a cross-check of identified entities
to identify any potential gaps).



CPF No. 4-2020-1002
Page 7
49 C.F.R. § 192.605(b) (Item 1) ─ Respondent’s alleged failure to conduct annual
reviews of its manual as required by FLNG’s Gas Pipeline Operations and
Maintenance Manual (FLNG-GOM-100).
FLNG presented information in its Response showing it had complied with the requirement, as
well as information showing that it had taken certain actions to address the cited item. Under
§ 190.205, PHMSA does not adjudicate warning items to determine whether a probable violation
occurred. If OPS finds a violation of this provision 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 filing of a petition automatically stays
the payment of any civil penalty assessed. The other 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 27, 2020
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

420201002_NOPV PCP PCO_01272020_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
January 27, 2020
Michael S. Smith
Chairman & CEO
Freeport LNG Development, L.P.
333 Clay Street, Suite 5050
Houston, Texas 77002
CPF 4-2020-1002
Dear Mr. Smith:
From June 25 through September 26, 2019, representatives of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter
601 of 49 United States Code (U.S.C.) inspected Freeport LNG Development, L.P.’s (FLNG)
pipeline system procedures, records, and facilities located in Freeport, Texas.
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:
1. § 192.605 Procedural manual for operations, maintenance, and emergencies.
(a) 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 once 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.
FLNG failed to follow, for each pipeline, a manual of written procedures for conducting
operations and maintenance activities, and for emergency response. FLNG failed to
provide documentation showing that annual reviews of its gas transmission pipeline system
as required by FLNG-GOM-100, Gas Pipeline Operations and Maintenance Manual were
performed.
FLNG-GOM-100, Gas Pipeline Operations and Maintenance Manual, requires annual
reviews. According to FLNG, it conducted its reviews annually for the past three
years; however, no documentation was provided during the inspection to document the
annual review.
FLNG failed to use the log referred to in the procedure to document that there were no
changes to the manual when the annual review was conducted. The last review date listed
on the manual was 12/10/2018 is shown on each page.
2. §192.605 Procedural manual for operations, maintenance, and emergencies.
(b) Maintenance and normal operations. The manual required by paragraph (a) of this
section must include procedures for the following, if applicable, to provide safety
during maintenance and operations.
(8) Periodically reviewing the work done by operator personnel to determine the
effectiveness, and adequacy of the procedures used in normal operation and
maintenance and modifying the procedures when deficiencies are found.
FLNG failed to establish written procedures for the periodic review of the work done by
operator personnel to determine the effectiveness, and adequacy of the procedures used in
normal operation and maintenance in accordance with § 192.605(b)(8).
PHMSA reviewed FLNG’s FLNG-GOM-100, Gas Pipeline Operations and Maintenance
Manual, and noted that the manual did not include procedures for the periodic review of
the work performed by operator personnel. Because it did not conduct the periodic
reviews, FLNG could not use those reviews to evaluate the effectiveness and adequacy of
its procedures.
3. § 192.614 Damage prevention program.
2



(c) The damage prevention program required by paragraph (a) of this section must,
at a minimum:
(1) Include the identity, on a current basis, of persons who normally engage in
excavation activities in the area in which the pipeline is located.
FLNG’s damage prevention program did not include the identity, on a current basis, of
persons who normally engage in excavation activities in the area in which its pipeline is
located as required by §192.614(c)(1). Specifically, FLNG does not incorporate the names
of associated contractors or excavators from its Third-Party Activity reports into its damage
prevention program so that the names are included in the mail-outs and communications
with excavators along the system.
During the PHMSA inspection, it was noted that several excavators had called into locate
tickets, but were not put on the next mailing list to receive communication from the
operator. One example is the excavator, Primoris Pipeline Services (Ticket No.
1884060433). The date of ticket was December 8, 2018, and this excavator was not found
on the 2019 mailing list.
4. §192.805 Qualification program.
Each operator shall have and follow a written qualification program. The program
shall include provisions to:
(a) Identify covered tasks;
(b) Ensure through evaluation that individuals performing covered tasks are
qualified;
(c) Allow individuals that are not qualified pursuant to this subpart to perform a
covered task if directed and observed by an individual that is qualified;
(d) Evaluate an individual if the operator has reason to believe that the individual's
performance of a covered task contributed to an incident as defined in Part 191;
(e) Evaluate an individual if the operator has reason to believe that the individual is
no longer qualified to perform a covered task;
(f) Communicate changes that affect covered tasks to individuals performing those
covered tasks;
(g) Identify those covered tasks and the intervals at which evaluation of the
individual's qualifications is needed;
(h) After December 16, 2004, provide training, as appropriate, to ensure that
individuals performing covered tasks have the necessary knowledge and skills to
perform the tasks in a manner that ensures the safe operation of pipeline
facilities…
FLNG failed to ensure through evaluation that employees were qualified to perform valve
3



inspections on eight separate occasions in 2018 and 2019.
During the inspection, FLNG operator qualification records of employees performing
valve inspections were reviewed. Valve Inspection records showed that two FLNG
employees with expired qualifications performed valve inspections on regulated
valves (BV-116, V20A08, and XV4345) on its 42-inch pipeline on eight separate
occasions in 2018 and 2019. At the time of the inspection, FLNG failed to provide
documentation indicating these two individuals were qualified while performing the
covered tasks.
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 and has
recommended that you be preliminarily assessed a civil penalty of $22,800 as follows:
Item number PENALTY
4 $ 22,800
Warning Items
With respect to Item 1 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 this item. Failure to do so may result
in additional enforcement action.
Proposed Compliance Order
With respect to items 2 and 3 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials
Safety Administration proposes to issue a Compliance Order to Freeport LNG Development, L. P.
(FLNG). 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
4



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 4-2020-1002 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
cc: Mark Mallett, Vice President of Operations & Engineering, Freeport LNG Development, L.P.,
333 Clay Street, Suite 5050, Houston, Texas 77002
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
5



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Freeport LNG Development, L.P., (FLNG) a
Compliance Order incorporating the following remedial requirements to ensure the compliance of
FLNG with the pipeline safety regulations:
1. 2. In regard to Item Number 2 of the Notice pertaining to establishing written
procedures for the periodic review of the work done by operator personnel to
determine the effectiveness, and adequacy of the processes used in normal
operations and maintenance and modifying the processes when deficiencies are
found, FLNG must develop written procedures and complete the periodic review
and submit documentation to PHMSA’s Southwest Region Director within 60 days
of issuance of the Final Order.
In regard to Item Number 3 of the Notice pertaining to failing to ensure that the
identity of persons who normally engage in excavation are identified as required
FLNG must develop a written procedure and submit that procedure to PHMSA’s
Southwest Region Director within 60 days of issuance of the Final Order.
It is requested (not mandated) that Freeport LNG Development, L. P. maintain documentation of
the safety improvement costs associated with fulfilling this Compliance Order and submit the total
to the 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

420201002_Closure Letter_10142020_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
October 14, 2020
Michael S. Smith
Chairman & CEO
Freeport LNG Development, L.P.
333 Clay Street, Suite 5050
Houston, Texas 77002
CPF 4-2020-1002
Dear Mr. Smith:
On July 27, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to Freeport LNG Development, L.P. (FLNG) a Final Order in the above-referenced case. This
Final Order included a Compliance Order and a Civil Penalty assessment. Based on our review of
the documentation provided and confirmation of payment of the Civil Penalty, it has been
determined that you have complied with the terms of this Order.
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
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