MIDSTREAM ENERGY PARTNERS (USA) LLC — Warning Letter

520080016W_warning letter_06182008.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 12300 W. Dakota Ave., Suite 110 Lakewood. CO 80228 WARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED June 18,2008 Mr. Scott Jones Plant Manager Inergy Propane, L.L.C. 9224 Tupman Road P.O. Box 430 Tupman, CA 93276 CPF 5-2008-0016W Dear Mr. Jones: From January 28 through 30,2008, a representative of the Pipeline and Hazardous Materials Safety Administration, pursuant to Chapter 601 of 49 United States Code, conducted an onsite inspection of your pipeline facilities and records in Tupman, California. As a result of the inspection, it appears that you have committed a probable violation as noted below of pipeline safety regulations, Title 49, CFR, Part 192. The item inspected and the probable violation is: 1. 5 192.491 Corrosion control records. (a) Each operator shall maintain records or maps to show the location of cathodically protected piping, cathodic protection facilities, galvanic anodes, and neighboring structures bonded to the cathodic protection system. Records or maps showing a stated number of anodes, installed in a stated manner or spacing, need not show specific distances to each buried anode. (b) Each record or map required by paragraph (a) of this section must be retained for as long as the pipeline remains in service.#

520080016W_warning letter_06182008.pdf, page 2(c) Each operator shall maintain a record of each test, survey, or inspection required by this subpart in sufficient detail to demonstrate the adequacy of corrosion control measures or that a corrosive condition does not exist. These records must be retained for at least 5 years, except that records related to §§192.465(a) and (e) and 192.475(b) must be retained for as long as the pipeline remains in service. Inergy Propane, L.L.C. did not keep atmospheric corrosion monitoring records. Field pipeline personnel revealed they had inspected portions of the pipeline exposed to the atmosphere, but no records were made available during the audit. Under 49 United States Code 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. We have reviewed the circumstances and have decided not to assess you a civil penalty. We advise you to correct the item identified in this letter. Failure to do so will result in Inergy Propane, L.L.C. being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 5-2008-0016W. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). Region Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 P. Nguyen (#I2 1 142)#