{"operation":"document","citation":"CPF 42022007NOPV","title":"KINETICA DEEPWATER EXPRESS LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-02-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 191.15(a), 191.17(a), 191.22(c)(2)(iv), 191.29(a)(1), 191.29(b), 192.717(a), 192.717(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022007nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022007nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022007nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022007NOPV","body":"Notice of Probable Violation involving KINETICA DEEPWATER EXPRESS LLC. PHMSA's enforcement data identifies the cited regulations as 191.15(a),  191.17(a),  191.22(c)(2)(iv),  191.29(a)(1),  191.29(b),  192.717(a),  192.717(b). The case was opened on 2022-02-11 and is reported as closed as of 2023-06-02. Proposed civil penalty: $46,600. Assessed civil penalty: $46,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022007NOPV_Closure Letter_06022023_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Closure%20Letter_06022023_(21-230161).pdf\n\n42022007NOPV_Closure Letter_06022023_(21-230161)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Closure%20Letter_06022023_(21-230161)_text.pdf\n\n42022007NOPV_Decision on Petition for Reconsideration_03222023_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Decision%20on%20Petition%20for%20Reconsideration_03222023_(21-230161).pdf\n\n42022007NOPV_Decision on Petition for Reconsideration_03222023_(21-230161)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Decision%20on%20Petition%20for%20Reconsideration_03222023_(21-230161)_text.pdf\n\n42022007NOPV_Final Order_10192022_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Final%20Order_10192022_(21-230161).pdf\n\n42022007NOPV_Final Order_10192022_(21-230161)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Final%20Order_10192022_(21-230161)_text.pdf\n\n42022007NOPV_Operator Petition for Reconsideration_11042022_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Operator%20Petition%20for%20Reconsideration_11042022_(21-230161).pdf\n\n42022007NOPV_Operator Response to Notice_03252022_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_Operator%20Response%20to%20Notice_03252022_(21-230161).pdf\n\n42022007NOPV_PCP PCO_02112022_(21-230161).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_PCP%20PCO_02112022_(21-230161).pdf\n\n42022007NOPV_PCP PCO_02112022_(21-230161)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022007NOPV/42022007NOPV_PCP%20PCO_02112022_(21-230161)_text.pdf\n\n42022007NOPV_Final Order_10192022_(21-230161)_text.pdf\n\nOctober 19, 2022\nVIA ELECTRONIC MAIL: kurt.cheramie@kineticallc.com\nMr. Kurt Cheramie\nSenior Vice President\nKinetica Partners, LLC\n1001 McKinney Street, Suite 900\nHouston, Texas 77002\nRe: CPF No. 4-2022-007-NOPV\nDear Mr. Cheramie:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws two of\nthe allegations of violation, makes other findings of violation, assesses a civil penalty of $46,600,\nand specifies actions that need to be taken by Kinetica Deepwater Express, LLC, to comply with\nthe pipeline safety regulations. The penalty payment terms are set forth in the Final Order.\nWhen the civil penalty has been paid and the terms of the compliance order completed, as\ndetermined by the Director, Southwest Region, this enforcement action will be closed. Service\nof the Final Order by e-mail is effective upon the date of transmission and acknowledgement of\nreceipt 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:\nMr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\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 )\nKinetica Deepwater Express, LLC, ) CPF No. 4-2022-007-NOPV\na subsidiary of Kinetica Partners, LLC, )\n)\n)\n)\nRespondent. )\n_____________________________________)\nFINAL ORDER\nFrom June 21, 2021, through October 18, 2021, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), inspected Kinetica Deepwater Express, LLC’s (KDE or Respondent) repair\nrecords following an incident that occurred on July 13, 2021, on its pipeline ID 341, El Paso\nPlatform 327-A, in Eugene Island, Louisiana. Kinetica Parnters, LLC, the parent company of\nKDE, owns and operates over 1,800 miles of natural gas transmission and gathering pipelines.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated February 11, 2022, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that KDE had violated 49 C.F.R. parts 191 and 192, proposed assessing\na civil penalty of $46,600 for the alleged violations, and proposed ordering Respondent to take\ncertain measures to correct the alleged violations. The Notice also included an additional\nwarning item pursuant to 49 C.F.R. § 190.205, which warned the operator to correct the probable\nviolation or face possible future enforcement action.\nKDE responded to the Notice by letter dated March 25, 2022 (Response). Respondent contested\nall the allegations and offered additional information in response to the Notice. Respondent did\nnot request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. parts 191 and 192, as follows:\n1 Kinetica Partners, LLC website, Pipeline Safety Portal, available at\nhttps://app.smartsheet.com/b/publish?EQBCT=225f8d51ee3041a3827b5f1dfcd39b20 (last accessed Oct. 13, 2022).\n\n\n\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.15(a),\n2 which states:\n§ 191.15 Transmission systems; gathering systems; liquefied natural\ngas facilities; and underground natural gas storage facilities: Incident\nreport.\n(a) Transmission or Gathering. Each operator of a transmission or a\ngathering pipeline system must submit DOT Form PHMSA F 7100.2 as\nsoon as practicable but not more than 30 days after detection of an incident\nrequired to be reported under § 191.5 of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.15(a) by failing to submit DOT\nForm PHMSA F 7100.2 (incident report) as soon as practicable, but not more than 30 days after\ndetection, of a reportable incident involving its 6-inch, 341 pipeline on the Eugene Island – 327\nA platform. Specifically, the Notice alleged that KDE did not timely file the incident report\nfollowing the July 13, 2021 release of natural gas.\nIn its Response, KDE argued that the July 13, 2021 release of natural gas did not constitute an\n“incident” as that term is defined by 49 C.F.R. § 191.3, because no injuries occurred, the total\nproperty damage was estimated to be less than $122,000, the unintentional estimated gas loss\nwas less than three million cubic feet, and the leak was not deemed significant in the judgment of\nthe operator. Therefore, respondent argued, submission of an incident report was not required.\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended withdrawing the alleged violation of § 191.15(a). I agree with this\nrecommendation.\nAccordingly, after considering all of the evidence and the legal issues presented, I hereby order\nthat Notice Item 1 be withdrawn.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 191.17(a),\n3 which states:\n§ 191.17 Transmission systems; gathering systems; liquefied natural\ngas facilities; and underground natural gas storage facilities: Annual\nreport.\n(a) Transmission or Gathering. Each operator of a transmission or a\ngathering pipeline system must submit an annual report for that system on\nDOT Form PHMSA 7100.2.1. This report must be submitted each year, not\nlater than March 15, for the preceding calendar year, except that for the\n2010 reporting year the report must be submitted on June 15, 2011.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.17(a) by failing to submit complete\nand accurate annual reports using DOT Form PHMSA 7100.2.1 (annual report). Specifically,\n2 The NOPV and this Final Order quotes 49 C.F.R.§ 191.15(a) as published on November 26, 2010, which was in\neffect at the time of the violation. The regulation was most recently amended on June 13, 2022.\n3 The NOPV and this Final Order quotes 49 C.F.R.§ 191.17(a) as published on November 26, 2010, which was in\neffect at the time of the violation. The regulation was most recently amended on June 13, 2022.\n\n\n\nthe Notice alleged that KDE’s annual reports for calendar years 2016, 2017, 2018, 2019, and\n2020 did not include mileage for pipelines acquired from ANR Pipeline Company on April 1,\n2016.\nIn its Response, Respondent argued that it submitted annual reports for the pipeline mileage in\nquestion using DOT Form PHMSA 7100.2.1 under OPID 39519 for calendar years 2016, 2017,\n2018, 2019, 2020, and 2021. Respondent provided copies of the reports with its Response.\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended withdrawing the alleged violation of § 191.17(a). The Director noted that since\nRespondent was created solely to operate the pipelines acquired from ANR Pipeline Company,\nits annual reports are sufficient because they reflect the mileage for the acquired pipelines. I\nagree with this recommendation.\nAccordingly, after considering all of the evidence, I hereby order that Notice Item 2 be\nwithdrawn.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. §§ 191.29(a)(1) and (b), which\nstates:\n§ 191.29 National Pipeline Mapping System.\n(a) Each operator of a gas transmission pipeline or liquefied natural gas\nfacility must provide the following geospatial data to PHMSA for that\npipeline or facility:\n(1) Geospatial data, attributes, metadata and transmittal letter\nappropriate for use in the National Pipeline Mapping System. Acceptable\nformats and additional information are specified in the NPMS Operator\nStandards Manual available at www.npms.phmsa.dot.gov or by contracting\nthe PHMSA Geographic Information Systems Manager at (202) 366-4595.\n(2) ….\n(b) The information required in paragraph (a) of this section must be\nsubmitted each year, on or before March 15, representing assets as of\nDecember 31 of the previous year. If no changes have occurred since the\nprevious year’s submission, the operator must comply with the guidance\nprovided in the NPMS Operator Standards manual available at\nwww.npms.phmsa.dot.gov or contact the PHMSA Geographic Information\nSystems Manager at (202) 366-4595.\nThe Notice alleged that Respondent violated 49 C.F.R. §§ 191.29(a)(1) and 191.29(b) by failing\nto submit complete and accurate National Pipeline Mapping System (NPMS) information\nrequired by § 191.29(a) on or before March 15 representing its assets as of December 31 of the\nprevious year. Specifically, on April 1, 2016, KDE acquired from ANR Pipeline Company\napproximately 470.7 miles of offshore pipeline assets located in the Gulf of Mexico and\napproximately 44.52 miles of onshore pipeline assets. The Notice alleged that since the 2016\nacquisition, Respondent has not submitted updates to NPMS to account for these assets.\nIn its Response, KDE argued that it submitted the required NPMS information for the pipeline\n\n\n\nmileage in question under OPID 39519 for calendar years 2016, 2017, 2018, 2019, 2020, and\n2021. Respondent provided screenshots from NPMS with its Response.\nAfter reviewing the additional documentation submitted by Respondent, I find Respondent did\nnot satisfy the requirements of §§ 191.29(a)(1) and 191.29(b). While Respondent filed NPMS\ninformation for each calendar year since 2016, these filings were incomplete. Exhibit D in the\ncase file shows the total mileage that KDE submitted to NPMS each year was 261 miles in 2016,\n219 miles in 2017, 219 miles in 2018, and 202 miles in 2019, 2020, and 2021. However, these\nNPMS submissions conflict with KDE’s annual reports submissions for those years, wherein\nRespondent indicated it operated over 400 miles of pipeline each year. Respondent did not\nprovide documentation to support its assertion that it accurately reported its total mileage to\nNPMS.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§§ 191.29(a)(1) and 191.29(b) by failing to submit complete and accurate NPMS information\nrequired by § 191.29(a) on or before March 15 representing its assets as of December 31 of the\nprevious year.4\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.717, which states:\n§ 192.717 Transmission lines: Permanent field repair of leaks.\nEach permanent field repair of a leak on a transmission line must be\nmade by –\n(a) Removing the leak by cutting out and replacing a cylindrical piece\nof pipe; or\n(b) Repairing the leak by one of the following methods:\n(1) Install a full encirclement welded split sleeve or appropriate design,\nunless the transmission line is joined by mechanical couplings and operates\nat less than 40 percent of SMYS.\n(2) If the leak is due to a corrosion pit, install a properly designed bolt-\non-leak clamp.\n(3) If the leak is due to a corrosion pit and on pipe of not more than\n40,000 psi (267 Mpa) SMYS, fillet weld over the pitted area a steel plate\npatch with rounded corners, of the same or greater thickness than the pipe,\nand not more than one-half of the diameter of the pipe in size.\n(4) If the leak is on a submerged offshore pipeline or submerged pipeline\nin inland navigable waters, mechanically apply a full encirclement split\nsleeve of appropriate design.\n(5) Apply a method that reliable engineering tests and analyses show\ncan permanently restore the serviceability of the pipe.\n4 In the “Recommendation” section of the August 9, 2022 Region Recommendation, the Southwest Region wrote\nthat it recommended withdrawing Item 4 and the associated compliance order requirements. However, it appears\nfrom the “Discussion” section that the Southwest Region did not actually recommend withdrawing this Item\n(“Therefore, Southwest Region recommends that the Final Order be issued finding KDE in violation of § 191.29(a)\nand (b) for Item 4. The Southwest Region recommends issuing the Proposed Compliance Order for Item 4 as\ndrafted in the Notice.”).\n\n\n\nThe Notice alleged that Respondent violated 49 C.F.R. §§ 192.717 by failing to complete a\npermanent field repair of a leak. Specifically, the Notice alleged that on July 16, 2021, KDE\nrepaired a through-wall pinhole leak with a Belzona Superwrap II composite wrap, and\ndocumented it as a “permanent” repair on its Pipeline Repair & Replacement Field Worksheet\n(Maximo Ticket Number 21-91661) and in its Pipeline Inspection Report (Repair Number BBH-\n4482). The Notice alleged neither § 192.717 nor KDE’s written procedure (in place since July\n2020) allows for through-wall leaks to be permanently repaired using composite wraps.\nIn its Response, Respondent contested the violation and stated that it had not updated its written\nprocedures to account for through-wall defects. Respondent argued that pursuant to 49 C.F.R.\n§ 192.717(b)(5), permanent field repairs of leaks may be made using a method that reliable\nengineering tests and analyses show can permanently restore the serviceability of the pipe. KDE\ncited several documents5 to support its assertion that the regulations allow operators to choose\nother methods to repair leaks, and it asserted that composite wraps are one such method.\nWhile I agree that Respondent’s procedures and 49 C.F.R. § 192.717(b)(5) permit operators to\nuse repair methods not specifically listed in the regulation, the procedures and regulation require\nthat those repair methods must permanently restore the serviceability of the pipe, as shown by\nreliable engineering tests and analyses. The PHMSA documents Respondent cited in its\nResponse reiterate that an operator’s repair method is permitted only when reliable engineering\ntests and analyses show that it permanently restores serviceability of the pipe. Respondent did\nnot provide or cite to any reliable engineering tests or analyses that show that Belzona wrap\npermanently restores the serviceability of pipe that has a leak.\nFurther, in email correspondence, the Southwest Region identified two industry standards which\nexplicitly prohibit the use of composite wraps to permanently repair leaks, including ASME\nB21-4 (2019) which prohibits the use of composites for repairing leaks for a permanent repair\nand ASME B31-8 (2018) which prohibits the use of composites for repairing leaks on a line\noperating over 100 psig. While Respondent is correct that these standards have not been\nincorporated by reference into part 192, the prohibition on the use of composite wraps to\npermanently repair leaks in these industry standards is evidence that using such composite wraps\ndoes not constitute a method that reliable engineering tests and analyses show can permanently\nrestore the serviceability of the pipe. Further, as mentioned above, Respondent failed to provide\nany other tests or analyses that show the Belzona Superwrap II composite wrap can permanently\nrestore the serviceability of pipe with a through-wall leak.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.717 by failing to complete a permanent field repair of a leak.\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\n5 64 Fed. Reg. 69660 (Dec. 14, 1999); PHMSA Letter of Interpretation (Nov. 18, 2010); Email from PHMSA\nSouthwest Region.\n\n\n\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.6\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $46,600 for the violations cited above.\nItem 5: The Notice proposed a civil penalty of $46,600 for Respondent’s violation of 49 C.F.R.\n§ 192.717, for failing to complete a permanent field repair of a leak. Respondent did not argue\nfor reduction or mitigation of the proposed civil penalty, rather argued that it did not violate\n§ 192.717. For the reasons given above, I found Respondent in violation of § 192.717.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $46,600 for violation of 49 C.F.R. § 192.717.\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,\nOklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $46,600 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 1, 2, 4, and 5 for violations of 49\nC.F.R. §§ 191.15(a), 191.17(a), 191.29(a)(1) and 191.29(b), and 192.717, respectively. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601.\nWith regard to the violations of §§ 191.15(a) and 191.17(a) (Items 1 and 2, respectively),\n6 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\nRespondent argued that the underlying allegations of violation should be withdrawn. For the\nreasons stated above, Items 1 and 2 of the Notice have been withdrawn. Consequently, the\nCompliance Order for these Items is hereby withdrawn.\nWith regard to the violation of §§ 191.29(a)(1) and 191.29(b), and 192.717 (Items 4 and 5,\nrespectively), Respondent argued that the underlying allegations of violation should be\nwithdrawn. KDE did not provide separate argument for withdrawal or modification of the\nCompliance Order for these Items absent withdrawal of the underlying allegations. For the\nreasons stated above, the underlying allegations of violation have not been withdrawn.\nConsequently, the Compliance Order for these Items is not withdrawn or modified for these\nItems.\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 § 191.29 (a)(1) and 191.29(b) (Item 4),\nRespondent must resubmit its calendar year (CY) 2020 NPMS submission to include\nassets acquired on April 1, 2016, from ANR, and provide PHMSA Southwest Region\na complete and accurate record of the CY 2020 NPMS submission, within 30 days\nfollowing receipt of the Final Order.\n2. With respect to the violation of § 192.717 (Item 5), Respondent must permanently\nrepair the leak on its Pipeline ID 341, El Paso Platform 327-A in Eugene Island,\nLouisiana, in compliance with its own procedures and § 192.717. Additionally,\nRespondent must review previous repairs made to its pipeline systems jurisdictional\nto 49 C.F.R. part 192, determine if any permanent repairs completed using the\nBelzona composite wraps remain, and provide a list of those repairs identified along\nwith its plans for remedial action to PHMSA Southwest Region. These actions must\nbe completed and Respondent must provide PHMSA Southwest Region with\ndocumentation verifying completion within 30 days following receipt of the Final\nOrder.\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.\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. 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.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (see 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.\n\n\n\nWARNING ITEM\nWith respect to Item 3, the Notice alleged probable violation of Part 191, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n49 C.F.R. § 191.22(c)(2)(iv) (Item 3) ─ Respondent’s alleged failure to file a\nType D acquisition notification through the National Registry of Operators for the\nacquisition of approximately 515 miles of gas transmission pipelines from ANR\nPipeline Company no later than 60 days following acquisition.\nRespondent, in its Response, provided additional information regarding this Item, and argued\nthat it had not violated § 191.22(c)(2)(iv). Under § 190.205, PHMSA does not adjudicate\nwarning items to determine whether a probable violation occurred. If OPS finds a violation of\nthis provision in a subsequent inspection, Respondent may be subject to future\nenforcement 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. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a\npetition automatically stays the payment of any civil penalty assessed. The other terms of the\norder, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nOctober 19, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n42022007NOPV_Decision on Petition for Reconsideration_03222023_(21-230161)_text.pdf\n\nMarch 22, 2023\nVIA ELECTRONIC MAIL TO: kurt.cheramie@kineticallc.com\nMr. Kurt Cheramie\nSenior Vice President\nKinetica Partners, LLC\n1001 McKinney Street, Suite 900\nHouston, Texas 77002\nRe: CPF No. 4-2022-007-NOPV\nDear Mr. Cheramie:\nEnclosed is the Decision on the Petition for Reconsideration (Decision) issued in the above-\nreferenced case. For the reasons explained therein, the Decision denies your petition. The\npenalty payment and compliance order terms remain unchanged from those set forth in the Final\nOrder issued October 19, 2022. This Decision constitutes the final administrative action in this\nproceeding. Service of this decision by electronic mail is effective upon the date of transmission\nas 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Bill Prentice, General Counsel, Kinetica Partners, LLC,\nbill.prentice@kineticallc.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____________________________________\n)\nIn the Matter of )\n)\nKinetica Deepwater Express, LLC, ) CPF No. 4-2022-007-NOPV\na subsidy of Kinetica Partners, LLC, )\n)\nPetitioner. )\n____________________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nFrom June 21, 2021, through October 18, 2021, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), inspected Kinetica Deepwater Express, LLC’s (KDE) records following an\nincident that occurred on July 13, 2021, on its pipeline ID 341, El Paso Platform 327-A, in\nEugene Island, Louisiana. Kinetica Partners, LLC (Kinetica or Petitioner), the parent company\nof KDE, owns and operates over 1,800 miles of natural gas transmission and gathering\npipelines.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to KDE, by\nletter dated February 11, 2022, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that KDE had violated 49 C.F.R. parts 191 and 192, proposed assessing a civil\npenalty of $46,600 for the alleged violations, and proposed ordering KDE to take certain\nmeasures to correct the alleged violations. The Notice also included an additional warning item\npursuant to 49 C.F.R. § 190.205, which warned the operator to correct the probable violation or\nface possible future enforcement action.\nKinetica, on behalf of KDE, responded to the Notice by letter dated March 25, 2022 (Response).2\nPetitioner contested all of the allegations of violation and offered additional information in\nresponse to the Notice. Kinetica did not request a hearing and therefore waived its right to one.\nOn October 19, 2022, pursuant to 49 U.S.C. §§ 60117 and 60122, and 49 C.F.R. § 190.213, the\n1 Kinetica Partners, LLC website, Pipeline Safety Portal, available at\nhttps://app.smartsheet.com/b/publish?EQBCT=225f8d51ee3041a3827b5f1dfcd39b20 (last accessed February. 22,\n2023).\n2 Kinetica Deepwater Express, LLC, Written Response CPF No. 4-2022-007-NOPV, dated March 25, 2022\n(Response) (on file with PHMSA).\n\n\n\nAssociate Administrator for Pipeline Safety issued a Final Order finding that KDE committed\nthe violations as alleged in the Notice (Final Order).3 The Final Order assessed a civil penalty of\n$46,600, pursuant to the authority of 49 U.S.C. § 60122 and 49 C.F.R. § 190.221, and ordered\nPetitioner to take certain measures to correct certain violations, pursuant to the authority of\n49 U.S.C. § 60118 and 49 C.F.R. § 190.217. The Final Order also included the additional\nwarning item pursuant to 49 C.F.R. § 190.205, warning KDE to correct the probable violation or\nface possible future enforcement action.\nOn November 4, 2022, Kinetica, on behalf of KDE, filed a Petition for Reconsideration pursuant\nto 49 C.F.R. § 190.243 (Petition).4 In its Petition, Kinetica requested reconsideration of Items 3,\n4, and 5 of the Final Order, which found violations of 49 C.F.R §§ 191.17(a), 191.29(a)(1) and\n(b), and 192.717(b)(5), respectively. It did not request reconsideration of the other Items within\nthe Final Order.\nI. Standard of Review\nUnder 49 C.F.R. § 190.243, a respondent may petition the Associate Administrator for\nreconsideration of a Final Order that has been issued pursuant to § 190.213. Reconsideration is\nnot an appeal or a completely new review of the record.5 A respondent may ask for correction of\nan error or, in limited circumstances, may present previously unavailable information. If a\nrespondent requests consideration of additional facts or arguments, the respondent must submit\nthe reasons they were not presented prior to the issuance of the Final Order. The Associate\nAdministrator may grant or deny, in whole or in part, a petition for reconsideration without\nfurther proceedings.\nII. Analysis\na. Item 3\nThe Final Order issued a warning to KDE regarding compliance with 49 C.F.R.\n§ 191.22(c)(2)(iv), which requires each operator of a gas pipeline facility to notify PHMSA of\nany of the acquisition or divestiture of 50 or more miles of a pipeline or pipeline system subject\nto Part 192. Specifically, the Notice alleged that KDE failed to file a Type D acquisition\nnotification through the National Registry of Operators for the acquisition of approximately 515\nmiles of gas transmission pipelines from ANR Pipeline Company no later than 60 days after\nacquisition. Petitioner argued in its Response that KDE was not at fault for the errors and\ndiscrepancies that were made in reporting the divestiture of assets from ANR Pipeline Company\nto KDE.\n3 Kinetica Deepwater Express, LLC, Final Order, CPF No. 4-2022-007-NOPV (Final Order) (October 19, 2022) (on\nfile with PHMSA).\n4 Petition for Reconsideration of CPF No. 4-2022-007-NOPV, dated November 4, 2022 (Petition) (on file with\nPHMSA).\n5 49 C.F.R. § 190.243(a)-(d).\n\n\n\nThe Final Order noted that, pursuant to § 190.205, PHMSA does not adjudicate warning items to\ndetermine whether a probable violation occurred. In its Petition, Kinetica again argued that it did\nnot violate § 191.22(c)(2)(iv) and requested that PHMSA withdraw the warning. However, as\nexplicitly set forth in its regulations, “[a]n adjudication under [§ 190.205] to determine whether a\nviolation occurred is not conducted for warnings.” Accordingly, there is no basis for\nreconsidering or withdrawing the warning item as alleged in the Notice.\nb. Item 4\nThe Final Order found that KDE violated 49 C.F.R. §§ 191.29(a)(1) and 192.29(b), which\nrequire each operator of a gas transmission pipeline to provide certain geospatial data to\nPHMSA. Specifically, the Notice alleged that KDE violated §§ 191.29(a)(1) and 129.29(b) by\nfailing to submit complete and accurate National Pipeline Mapping System (NPMS) information\nrequired by § 191.29(a) on or before March 15 representing its assets as of December 31 of the\nprevious year. On April 1, 2016, KDE acquired from ANR Pipeline Company approximately\n470.7 miles of offshore pipeline assets located in the Gulf of Mexico and approximately 44.52\nmiles of onshore pipeline assets. The Notice alleged that since the 2016 acquisition, KDE did\nnot submit updates to NPMS to account for these assets.\nIn its Response, Petitioner argued that it submitted the required NPMS information for the\npipeline mileage in question under OPID 39519 for calendar years 2016, 2017, 2018, 2019,\n2020, and 2021. Kinetica provided screenshots from the NPMS website with its Response.\nThe Final Order determined that KDE did not satisfy the requirements of §§ 191.29(a)(1) and\n192.29(b). Exhibit D in the case file showed the total mileage that KDE submitted to NPMS\neach year was 261 miles in 2016, 219 miles in 2017 and 2018, and 202 miles in 2019 and 2020.\nHowever, the Final Order found the reported mileage conflicted with KDE’s annual reports for\nthose years, wherein the company indicated it operated over 400 miles of pipelines in each of the\npertinent years.\nIn its Petition, Kinetica asserted that the lines not reported pursuant to § 192.29 were gathering\nlines, and thus not subject to the reporting requirements of that section. In support of its\nassertion, Petitioner submitted copies of its annual reports for calendar years 2016 through 2021.\nThese annual reports show that KDE reported the following pipeline mileage:\nCalendar Year Miles of Steel Transmission\nPipeline\nMiles of Steel Gathering\nPipeline\n2016 250.25 255.58\n2017 207.63 223.3\n2018 216.17 232.4\n2019 197.41 212.31\n2020 197.34 213.15\n2021 197.34 211.83\n\n\n\nPetitions for reconsideration provide a vehicle for respondents to submit evidence or arguments\nnot previously available during the proceeding. The Associate Administrator does not consider\nrepetitious information but may consider additional facts or arguments, provided that the\nrespondent submits a valid reason why such information was not presented prior to issuance of\nthe final order. Here, the annual report information, including gathering line mileage, was\npreviously available to the Petitioner and to PHMSA, and in fact was cited by the Associate\nAdministrator in the Final Order. Petitioner failed to present additional facts in this Petition that\nwere not presented prior to the issuance of the Final Order. Petitioner also failed to submit a\nvalid reason for failing to present its specific argument regarding gathering line mileage before\nthe Final Order was issued.\nEven considering the evidence and arguments provided in the Petition, I find that the Final Order\ncorrectly concluded Petitioner did not comply with § 192.29. The evidence provided with the\nResponse and Petition shows the mileage KDE reported to PHMSA pursuant to §§ 191.29(a)(1)\nand 129.29(b) conflicts with the mileage of steel transmission pipeline it reported to PHMSA in\nits 2016 through 2020 annual reports even when the gathering line mileage is excluded.\nPetitioner’s argument regarding the gathering line mileage does not negate the veracity of the\nunderlying finding of violation–that KDE did not accurately report its pipeline mileage in\naccordance with § 192.29. Accordingly, I find no basis for withdrawing the finding of violation\nof §§ 191.29(a)(1) and 192.29(b).\nc. Item 5\nThe Final Order found that KDE violated 49 C.F.R. § 192.717(b)(5) by failing to complete a\npermanent field repair of a leak. Specifically, the Notice alleged that on July 16, 2021, KDE\nrepaired a through-wall pinhole leak with a Belzona Superwrap II composite wrap, and\ndocumented it as a “permanent” repair on its Pipeline Repair & Replacement Field Worksheet\n(Maximo Ticket Number 21-91661) and in its Pipeline Inspection Report (Repair Number BBH-\n4482). The Notice alleged neither § 192.717 nor KDE’s written procedures allow for through-\nwall leaks to be permanently repaired using composite wraps.\nIn response to the Notice, Petitioner argued that pursuant to § 192.717(b)(5), permanent field\nrepairs of leaks may be made using a method that reliable engineering tests and analyses show\ncan permanently restore serviceability of the pipe. It also stated that it had not updated its written\nprocedures to account for through-wall defects. Kinetica cited several documents6 in its\nResponse to support its assertion that the regulations allow operators to choose other methods to\nrepair leaks, and it asserted that composite wraps are one such method.\nThe Final Order determined that KDE violated § 191.717 by failing to perform the leak repair\nwith a method that is shown by reliable engineering tests and analyses to permanently restore\nserviceability of the pipe. In reaching this determination, the Final Order stated that Petitioner\ndid not provide or cite to any reliable engineering tests or analyses that show Belzona Superwrap\nII composite wrap permanently restores serviceability of a pipe that has a leak.\n6 64 Fed. Reg. 69660 (Dec. 14, 1999); PHMSA Letter of Interpretation (November 18, 2010); Email from PHMSA\nSouthwest Region.\n\n\n\nWith its Petition, Kinetica attached three product specification sheets from 2015, 2016, and\n2019, four design and repair procedure documents prepared in October 2017, July 2021, May\n2022, and October 2022, and a prequalification testing document from 2018, all pertaining to\nBelzona Superwrap II composite wrap.\n7 All of these records pre-date PHMSA’s issuance of the\nFinal Order. Petitioner did not provide these documents with its Response, nor did it provide a\nreason why it did not present such information prior to PHMSA’s issuance of the Final Order. In\nits Petition, Kinetica noted that a professional engineer recently reviewed the design and repair\nprocedure document that was initially prepared in July 2021. Petitioner argued these documents\nshow “that composite wraps do provide a method to permanently restore serviceability of the\npipe.\n”\nAfter considering the evidence submitted with the Petition, I find the information therein actually\nbelies Petitioner’s argument that composite wraps permanently restore serviceability of pipe.\nThe design and repair procedure prepared in October 2017, titled “Belzona SuperWrap II,” states\nthrough-wall defects can continue to grow after implementation of the repair. Further, the\nASME and ISO standards cited in this document state that the composite wrap repair has a\nmaximum service life of 20 years. The document submitted by the Petitioner that included an\nengineer’s review of a procedure does not dispute these facts. The evidence included with the\nPetition supports the finding in the Fin","truncated":true,"body_characters":43888}