QEP FIELD SERVICES COMPANY — Notice of Probable Violation

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520085019_NOPV PCO letter_06192008.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 12300 W. Dakota Ave., Suite 110 Lakewood, CO 80228 NOTICE OF PROBABLE VIOLATION and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED June 19,2008 Mr. Perry Richards General Manager Questar Gas Management 1050 1 7th street, Suite 500 Denver, CO 80265 CPF 5-2008-5019 Dear Mr. Richards: On April 23,2008, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your Integrity Management Program (IMP) near Lyman, Wyoming. As a result of the inspection, it appears that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The item inspected and the probable violation is: 1. 5195.452 Pipeline integrity management in high consequence areas. (b) What program and practices must operators use to manage pipeline integrity? Each operator of a pipeline covered by this section must: (3) Include in the program a plan to carry out baseline assessments of line pipe as required by paragraph (c) of this section. (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan:#

520085019_NOPV PCO letter_06192008.pdf, page 2(i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. The methods an operator selects to assess low frequency electric resistance welded pipe or lap welded pipe susceptible to longitudinal seam failure must be capable of assessing seam integrity and of detecting corrosion and deformation anomalies. (A) Internal inspection tool or tools capable of detecting corrosion and deformation anomalies including dents, gouges and grooves; (B) Pressure test conducted in accordance with subpart E of this part; (C) External corrosion direct assessment in accordance with 5195.588; or (D) Other technology that the operator demonstrates can provide an equivalent understanding of the condition of the line pipe. An operator choosing this option must notify the Office of Pipeline Safety (OPS) 90 days before conducting the assessment, by sending a notice to the address or facsimile number specified in paragraph (m) of this section.; (ii) A schedule for completing the integrity assessment; (iii) An explanation of the assessment methods selected and evaluation of risk factors considered in establishing the assessment schedule. (2) An operator must document, prior to implementing any changes to the plan, any modification to the plan, and reasons for the modification. Questar Gas Management (QGM) completed a pressure test of their propane line as a baseline assessment in July of 2005. The pressure record provided to our inspector indicated that the test was not conducted in accordance with 49 CFR Part 195, Subpart E. The test pressure was only maintained for four hours on a pipeline that could not be visually inspected. Buried lines must be tested for at least eight hours. In addition, nitrogen was inappropriately used as the test medium. Proposed Compliance Order Pursuant to 49 United States Code § 60 1 18, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Questar Gas Management. Please refer to the Proposed Compliance Order that 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. 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). 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.#

520085019_NOPV PCO letter_06192008.pdf, page 3In your correspondence on this matter, please refer to CPF 5-2008-5019 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Chri Director, Western Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings cc: PHP-60 Compliance Registry PHP-500 H. Nguyen (#I21 193)#

520085019_NOPV PCO letter_06192008.pdf, page 4PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code $ 601 18, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Questar Gas Management a Compliance Order incorporating the following remedial requirements to ensure the compliance of Questar Gas Management with the pipeline safety regulations: 1. 2. 3. In regard to Item Number 1 of the Notice pertaining to your pipeline systems, Questar Gas Management must conduct a pressure test in accordance with Part 195 Subpart E. Within 60 days of issuance of the Final Order, Questar Gas Management must complete the above items, and submit the required documentation and procedures to the Director, Western Region, Pipeline and Hazardous Materials Safety Administration, 12300 West Dakota Avenue, Suite 110, Lakewood, Colorado 80228. Questar Gas Management shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Chris Hoidal, Director, Western Region, Pipeline and Hazardous Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated with preparationlrevision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure.#

520085019_FinalOrder_03042010 _text.pdf, page 1Official PDFMAR 4 2010 Mr. Charles B. Stanley President and Chief Executive Officer Questar Gas Management Company 1050 17th Street, Suite 500 Denver, CO 80265 Re: CPF No. 5-2008-5019 Dear Mr. Stanley: Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of violation and finds that Questar Gas Management Company has completed the actions specified in the Notice to comply with the pipeline safety regulations. Therefore, this case is now closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Chris Hoidal, Director, Western Region, OPS Mr. Perry Richards, Vice President of Operations, Questar Gas Management Company CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 5088]#

520085019_FinalOrder_03042010 _text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ______________________________ In the Matter of ) Questar Gas Management ) CPF No. 5-2008-5019 Company, ) ) ) ) Respondent. ) ______________________________) FINAL ORDER On April 23, 2008, pursuant to 49 U.S.C. § 60117, a representative 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 Questar Gas Management Company (Questar or Respondent) near Lyman, Wyoming, including the Emigrant Trail Pipeline System, an 8.9-mile-long pipeline constructed in 1984, and the Black Forks Pipeline System, a pair of 2.85-mile-long pipelines constructed in 1995. As a result of the inspection, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated June 19, 2008, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Questar had violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B) and proposed ordering the company to take certain measures to correct the alleged violation. Questar responded to the Notice by letters dated July 16, 2008, and February 9, 2009 (collectively, Response). Respondent did not contest the allegations of violation but provided information concerning the corrective actions it had taken. Questar did not request a hearing and therefore has waived its right to one. FINDING OF VIOLATION In its Response, Questar did not contest the allegation in the Notice that it violated 49 C.F.R. Part 195, as follows:#

520085019_FinalOrder_03042010 _text.pdf, page 32 Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B), which state, in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (a) . . . . (b) What program and practices must operators use to manage pipeline integrity? Each operator of a pipeline covered by this section must: (1) . . . . (3) Include in the program a plan to carry out baseline assessments of line pipe as required by paragraph (c) of this section. (4) . . . . (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. . . . (B) Pressure test conducted in accordance with subpart E of this part; In particular, the Notice alleged that Questar violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B) by failing to perform an 8-hour pressure test of its buried propane pipeline as part of the company’s baseline assessment. Instead, the Notice alleged that Respondent had only performed a 4-hour pressure test, an inadequate length of time for a pipeline that cannot be visually review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(b)(3) and inspected.1 Questar did not contest this allegation of violation.2 Accordingly, based upon a (c)(1)(i)(B) by failing to perform an 8-hour pressure test of its buried propane line as part of the company’s baseline assessment. 1 49 C.F.R. § 195.304. 2 The Notice also alleged that Respondent erred in using nitrogen as the test medium. However, in its Response, Questar provided the Director with documentation confirming that the maximum operating pressure of the line in question is less than 20 percent of the specified minimum yield strength of the line pipe, thereby permitting the use of nitrogen as a test medium. See 49 C.F.R. §§ 195.2 (defining low-stress pipeline), 195.306(d) (permitting use of inert gases as a test medium for low-stress pipelines).#

520085019_FinalOrder_03042010 _text.pdf, page 43 This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violations of 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director has indicated that Respondent has taken the following actions specified in the proposed compliance order: On November 6, 2008, Questar performed an 8-hour pressure test of its propane and butane lines. The Director has reviewed the documentation from those tests and determined that each was conducted in compliance with the requirements of Part 195. Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice are not included in this Order. The terms and conditions of this Final Order are effective upon receipt of service. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

520085019_FinalOrder_03042010.pdf, page 1Official PDFU.S. Department of Transportation 1200 New Jersey Ave, S.E. Pipeline and Hazardous Materials Washington, D.C. 20590 Safety Administration MAR 4 2010 Mr. Charles B. Stanley President and Chief Executive Officer Questar Gas Management Company 1050 17" Street, Suite 500 Denver, CO 80265 Re: CPF No. 5-2008-5019 Dear Mr. Stanley: Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of violation and finds that Questar Gas Management Company has completed the actions specified in the Notice to comply with the pipeline safety regulations. Therefore, this case is now closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Mark Mate, for: Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure Mr. Chris Hoidal, Director, Western Region, OPS Mr. Perry Richards, Vice President of Operations, Questar Gas Management Company CERTIFIED MAIL - RETURN RECEIPT REQUESTED [7009 1410 0000 2472 5088]#

520085019_FinalOrder_03042010.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of ) ) Questar Gas Management CPF No. 5-2008-5019 Company, ) Respondent. FINAL ORDER On April 23, 2008, pursuant to 49 U.S.C. § 60117, a representative 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 Questar Gas Management Company (Questar or Respondent) near Lyman, Wyoming, including the Emigrant Trail Pipeline System, an 8.9-mile-long pipeline constructed in 1984, and the Black Forks Pipeline System, a pair of 2.85-mile-long pipelines constructed in 1995. As a result of the inspection, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated June 19, 2008, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Questar had violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B) and proposed ordering the company to take certain measures to correct the alleged violation. Questar responded to the Notice by letters dated July 16, 2008, and February 9, 2009 (collectively, Response). Respondent did not contest the allegations of violation but provided information concerning the corrective actions it had taken. Questar did not request a hearing and FINDING OF VIOLATION In its Response, Questar did not contest the allegation in the Notice that it violated 49 C.F.R. Part 195, as follows:#

520085019_FinalOrder_03042010.pdf, page 32 Item I: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B), which state, in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (a) .... (b) What program and practices must operators use to manage pipeline integrity? Each operator of a pipeline covered by this section must: (1).... (3) Include in the program a plan to carry out baseline assessments of line pipe as required by paragraph (c) of this section. (4).... (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods.... (B) Pressure test conducted in accordance with subpart E of this part; In particular, the Notice alleged that Questar violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B) y failing to perform an 8-hour pressure test of its buried propane pipeline as part of the ompany's baseline assessment. Instead, the Notice alleged that Respondent had only performer inspected.' Questar did not contest this allegation of violation? Accordingly, based upon a a 4-hour pressure test, an inadequate length of time for a pipeline that cannot be visually review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B) by failing to perform an 8-hour pressure test of its buried propane line as part of the company's baseline assessment. ' 49 C.F.R. § 195.304. 2 The Notice also alleged that Respondent erred in using nitrogen as the test medium. However, in its Response, Questar provided the Director with documentation confirming that the maximum operating pressure of the line in of nitrogen as a test medium. See 49 C.F.R. §§ 195.2 (defining low-stress pipeline), 195.306(d) (permitting use of question is less than 20 percent of the specified minimum yield strength of the line pipe, thereby permitting the use inert gases as a test medium for low-stress pipelines).#

520085019_FinalOrder_03042010.pdf, page 43 This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violations of 49 C.F.R. § 195.452(b)(3) and (c)(1)(i)(B). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director has indicated that Respondent has taken the following actions specified in the proposed compliance order: On November 6, 2008, Questar performed an 8-hour pressure test of its propane and butane lines. The Director has reviewed the documentation from those tests and determined that each was conducted in compliance with the requirements of Part 195. Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice are not included in this Order. The terms and conditions of this Final Order are effective upon receipt of service. Maut Wann MAR 4 2010 for Jettrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#