# HILCORP ALASKA, LLC — Safety Order

- **operation:** document
- **citation:** CPF 520176006S
- **title:** HILCORP ALASKA, LLC — Safety Order
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2017-03-17
- **effective on:** Not available
- **summary:** CLOSED safety order.
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520176006S
**body:**

Safety Order involving HILCORP ALASKA, LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2017-03-17 and is reported as closed as of 2019-02-01. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520176006S_Notice of Proposed Safety Order_03172017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Notice%20of%20Proposed%20Safety%20Order_03172017.pdf

520176006S_Notice of Proposed Safety Order_03172017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Notice%20of%20Proposed%20Safety%20Order_03172017_text.pdf

520176006S_Region Withdrawal of Notice Letter_02012019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Region%20Withdrawal%20of%20Notice%20Letter_02012019.pdf

520176006S_Region Withdrawal of Notice Letter_02012019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Region%20Withdrawal%20of%20Notice%20Letter_02012019_text.pdf

520176006S_Notice of Proposed Safety Order_03172017_text.pdf

VIA FACSIMILE TO (907) 777-8301 AND CERTIFIED MAIL
March 17, 2017
Mr. Greg Lalicker
President
Hilcorp Alaska, LLC
1201 Louisiana Street, Suite 1400
Houston, Texas 77002
CPF 5-2017-6006S
Dear Mr. Lalicker:
Enclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.
The Notice proposes that you take certain measures with respect to Hilcorp Alaska, LLC’s1
Middle Ground Shoal (MGS) Hazardous Liquid System located in Cook Inlet, Alaska, to ensure
pipeline safety. Your options for responding are set forth in the Notice. Your receipt of the
Notice constitutes service of that document under 49 C.F.R. § 190.5.
We look forward to a successful resolution of this integrity issue to ensure pipeline safety.
Please direct any questions on this matter to me at 720-963-3160.
Sincerely,
Chris Hoidal
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Notice of Proposed Safety Order & Attachment A (General Overview Map)
cc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS
Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS
Ms. Erin McKay, Regulatory Compliance Manager, Alaska Integrity Group, Hilcorp Alaska,
LLC, emckay@hilcorp.com
1 Hilcorp Alaska, LLC, operates as a subsidiary of Hilcorp Energy Company.



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WESTERN REGION
LAKEWOOD, COLORADO 80228
________________________________________________
In the Matter of )
)
)
Hilcorp Alaska, LLC, )
a subsidiary of Hilcorp Energy Company, )
Respondent. )
_______________________________________________ )
) CPF No. 5-2017-6006S
NOTICE OF PROPOSED SAFETY ORDER
Background and Purpose
Pursuant to Chapter 601 of Title 49, United States Code, the Pipeline and Hazardous Materials
Safety Administration (PHMSA), U.S. Department of Transportation, has initiated an
investigation and information review of the safety of your Middle Ground Shoal (MGS)
Hazardous Liquid System, consisting of approximately 14 miles of in-service crude oil pipeline
mileage located in the Cook Inlet of Alaska. This investigation stems from a gas leak on
Hilcorp’s parallel natural gas pipeline that was first reported by Hilcorp Alaska, LLC (Hilcorp)
on February 7, 2017. That leak continues to discharge natural gas (methane) into the waters of
Cook Inlet.
The MGS Hazardous Liquid System transports produced liquids (oil and water) from Hilcorp’s
offshore “A Platform,” “Baker Platform,” “C Platform,” and “Dillon Platform,” to the MGS
onshore facility located in Nikiski, Alaska.2 From the MGS onshore facility, crude oil is
transported by pipeline to the Tesoro Kenai Refinery. The MGS Hazardous Liquid System’s
pipeline is identified as the “B Pipeline” and consists of the following four sections: 1) the “A
Platform” to the MGS onshore facility; 2) the “C Platform” to the “A Platform;” 3) the “Baker
Platform” to the “A Platform;” and 4) the “Dillon Platform” to the “C Platform.”3 The “B Crude
Pipeline” is located adjacent and parallel to the leaking natural gas “A Pipeline.”
2 See Attachment A, General overview map of the pipeline system. All of the referenced Hilcorp platforms utilize
gas from the MGS Fuel Gas System, which is the subject of a separate but related Notice of Proposed Safety Order,
issued by PHMSA on March 3, 2017. See Notice, CPF No. 5-2017-0004S, available at
http://www.phmsa.dot.gov/pipeline/hilcorp-gas-leak-cook-inlet-alaska.
3 See id.



As a result of PHMSA’s investigation and information review, it appears that conditions exist on
the MSG Hazardous Liquid System that pose a pipeline integrity risk to public safety, property
or the environment. Pursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of Proposed
Safety Order (Notice), notifying you of the preliminary findings of the investigation and
proposing that you take certain measures to ensure that the public, property, and the environment
are protected from this integrity risk.
For purposes of this Notice, the term Affected Pipeline Facility means the 8-inch-diameter “B
Pipeline” and consists of the following four sections: 1) the MGS onshore facility to the “A
Platform;” 2) the “A Platform” to the “Baker Platform;” 3) the “A Platform” to the “C Platform;”
and 4) the “C Platform” to the “Dillon Platform.”
Preliminary Findings:
 On March 3, 2017, PHMSA issued to Hilcorp a Notice of Proposed Safety Order, CPF
No. 2017-0004S, related to a natural gas leak on Hilcorp’s MGS Fuel Gas System. As of
the date of this Notice, the gas leak is occurring on Hilcorp’s “A Pipeline” segment of the
offshore (subsea) portion of the MGS Fuel Gas System. The gas leak is located
approximately 2.6 miles from the “A Platform” and approximately 4.6 miles from the
MGS onshore facility (as measured along the pipeline alignment).
4 The MGS onshore
facility services both the “A Pipeline” and the “B” Pipeline.
 The gas leak was reported on February 7, 2017, and is still ongoing, with a current
estimated leak rate of between 193,000 and 215,000 cubic feet per day.
 The accident was initially reported by Hilcorp to the National Response Center at 7:49
pm EST on February 7, 2017 (NRC Report No. 1170504), indicating an unknown
quantity release of natural gas. In addition, Hilcorp’s Regulatory Compliance Manager
left a phone message for a PHMSA Anchorage Office employee on February 7, 2017, at
8:25 pm EST.
 Hilcorp reports that in late January 2017, it noticed an increased trend in pipeline flow
data on the “A Pipeline.” In response to this data, Hilcorp indicates that it conducted
aerial pipeline surveillances by helicopter, looking specifically for leaks, and discovered
the leak on February 7, 2017. Subsequently, Hilcorp’s flow analysis revealed that the
pipeline began leaking in late December 2016.
 The “A Pipeline” begins at the onshore facility and is routed to the “A Platform.” At the
“A Platform,” the pipeline bifurcates, with one leg extending to the “Baker Platform” and
the other to the “C Platform” and the “Dillon Platform.” The “A Pipeline” is an 8-inch
4 Hilcorp’s MGS Fuel Gas System provides non-odorized gas (including oil production lift gas) to Hilcorp’s
offshore “A Platform,” “Baker Platform,” “C Platform,” and “Dillon Platform,” all utilizing gas from the East Cook
Inlet Gas Gathering System (ECIGGS). The MGS pipeline system begins at the three-inch tie-in to the ECIGGS
pipeline on Wik Road in Nikiski, Alaska. The pipeline passes through Station O (201 Meter) and the MGS onshore
facility before transitioning to the subsea portion that extends to the platforms in Cook Inlet. The offshore (subsea)
portion of the MGS Fuel Gas System is identified as the “A Pipeline.”



nominal diameter gas transmission pipeline and was converted from liquid to gas service
in 2005.
 The “B Pipeline,” is a crude-oil pipeline that is in close proximity to the “A Pipeline.”
The “B Pipeline” has similar pipeline characteristics as those of the “A Pipeline” and
transports hazardous liquids produced and initially processed by the offshore platforms to
the MGS onshore facilities. The “B Pipeline” is operating in an environment
substantially similar to the “A Pipeline.”
 The “A Platform” and “C Platform” produce crude oil, conduct initial processing, and are
manned 24 hours a day, seven days a week. The “Baker Platform” and “Dillon Platform”
are in “light house” mode and are unmanned.5
 The “B Pipeline” is an 8-inch nominal diameter, steel pipeline with a 0.593” wall
thickness. The pipeline is comprised of Grade B seamless pipe with X-Tru Coat and one-
inch concrete weight coating. The portion of the “B Pipeline” running from the “A
Platform” to the MGS onshore facility was installed in 1965.
 Hilcorp Alaska, LLC (OPID: 32645), purchased oil and gas facilities located in Nikiski,
Alaska, from XTO Energy, Inc. (OPID: 31178), on September 1, 2015. This purchase
included the “B Pipeline.”
 The product being transported by the “B Pipeline” is produced liquids (oil and water)
from the “A Platform” and the “C” Platform. The pipeline operates continuously and has
a normal operating pressure of approximately 150 psig - 260 psig. The Maximum
Operating Pressure (MOP) of the “B Pipeline” is 592 psig.
 The majority of the “B Pipeline” is located within the waters of the Cook Inlet, a
commercially navigable waterway. The waters of Cook Inlet are a habitat for several
species listed by the Endangered Species Act, and is a designated Critical Habitat for the
Cook Inlet beluga whales (endangered). There are only an estimated 340 remaining
Cook Inlet belugas; therefore, significant impacts to any individual belugas, particularly
lethal take, could have population-level effects.
 As a result of the multiple state and federal agencies’ response to the “A Pipeline” natural
gas leak incident, the Alaska Department of Environmental Conservation has compiled a
list of “Resources at Risk,” which details the environmental risks associated with the
ongoing leak.
 The National Oceanic and Atmospheric Administration (NOAA), National Marine
Fisheries Service (NMFS), has expressed concerns to PHMSA about the potential
environmental damage that may result from the continued release of gas in Cook Inlet.
5 “Light house” mode means no active production is taking place at these platforms. The primary operating objectives
for light house mode platforms are the continual operation of impressed current cathodic protection systems and
navigational-aid lighting.



By letter dated February 24, 2017, NMFS provided PHMSA with an outline of the
species and designated critical habitat that occur in Cook Inlet and documented its
concerns regarding the potential effects of the leak on marine mammals, including the
critically-endangered Cook Inlet beluga whales. NOAA also provided PHMSA with a
map showing the March distribution of satellite-tagged beluga whales in 2002 and 2003.
The map shows that the Cook Inlet belugas spend a significant amount of time near the
“A Pipeline” and “B Pipeline.”
 The Alaska Department of Environmental Conservation (ADEC) has also responded to
the ongoing leak because it considers the leak to be a discharge of hazardous substance
into or upon the waters or lands of the state that is prohibited unless authorized by
ADEC, under Alaska Statute 46.03.745. By letter dated February 27, 2017, ADEC
ordered Hilcorp to conduct environmental sampling and monitoring. To date, ADEC has
issued four Situation Reports regarding the leak. ADEC also has described the
environmentally sensitive areas and wildlife issues in its Incident Report, which was
prepared with input from the National Marine Fisheries Service, the Alaska Department
of Fish and Game, and the U.S. Fish and Wildlife Service (USFWS).
 PHMSA has consulted with USFWS personnel regarding the potential risks to marine life
associated with the ongoing leak from the “A Pipeline”. They indicated that the current
risk to birds, sea duck, and water fowl from the gas leak are low at present, but that the
risk will increase with the beginning of seasonal migration, which typically begins in late
March. In addition, fish migration will begin about mid-April, including hooligan and
salmon smelt.
 Hilcorp has taken the following actions since reporting the leak on February 7, 2017: (1)
the operating pressure on the “A Pipeline” was lowered to 145 psi; (2) periodic helicopter
overflights have been conducted for visual surveillance of the leak area; (3) periodic
situational reports were compiled; (4) analyses of different operational options was
performed; (5) the estimated gas leak rate was calculated; (6) the company shut down
non-essential equipment on the offshore platforms to minimize gas demand; (7) modeling
on methane dispersion in Cook Inlet waterway was performed; (8) preliminary
preparations for divers and dive boat to perform necessary repairs when ice conditions
and weather permitted were made; (9) the company participated in meetings with federal
and state agencies to coordinate response efforts; and (10) an initial monitoring and
sampling plan was submitted to ADEC. As of the date of this Notice, no sampling of the
release site has occurred.
 Since the leak on the “A Pipeline” was discovered, Hilcorp has maintained normal
operations on the “B Pipeline,” with a current operating pressure of approximately 175
psi, a flow rate of 3700 barrels per day, and a 63% water cut (63% of flow consists of
water).
 PHMSA has reviewed information from Hilcorp and the state and Federal agencies noted
above, suggesting that certain risks are presented by the various alternatives for
responding to the failure on the “A Pipeline.” These alternatives include: (a) immediate



repair of the “A Pipeline;” (b) continued operation of the “A Pipeline” until it can be
safely repaired; and (c) shutting in the “A Pipeline” until it can be safely repaired. To
date, Hilcorp has indicated it believes the safest alternative is to continue operating the
“A Pipeline,” at reduced pressure and through-put until it can be safely repaired.
 PHMSA acknowledges from assertions made by Hilcorp that immediate repair of the leak
would pose an extreme risk to personnel during the current winter conditions where
diving operations are required to access, investigate, and repair the “A Pipeline”.
Because of sea ice, weather conditions, and the Cook Inlet’s extreme tides and currents,
diving operations cannot be safety conducted at present and, therefore, immediate repair
of the leaking pipeline is not a viable option. It is estimated the sea ice and weather
condition could allow safe diving operations as early as late March but not later than the
end of April 2017.
 PHMSA recognizes that the majority of the MGS pipeline system is located within the
waters of the Upper Cook Inlet, which is known for extreme tides (average tides of 20
feet, maximum tides of 35 feet, and currents more than 5 to 7 knots) and the presence of
dynamic sea-ice conditions.
 Hilcorp has further indicated to PHMSA that the company cannot access the failure
location on the “A Pipeline” until the ice clears, at which time diving operations can
safely be conducted to access, investigate, and repair the leak. According to Hilcorp, the
ice could clear as early as late March or as late as the end of April 2017. The
serviceability of the “A Pipeline” will remain impaired until at least this time.
 The ongoing gas leak is the third leak on the “A Pipeline” since June 2014. The two
previous leaks were in June 2014 and August 2014, during ice-free conditions. The
previous operator determined that those leaks were caused by rocks contacting the
pipeline in areas where the pipeline was not continuously supported by the seabed. The
rocks contacting the pipeline deteriorated the steel pipe wall by abrasion, resulting from
relative movement between the pipeline and rocks contacting the pipeline. Both leaks
were repaired by installation of bolt-on, split-sleeve clamps. The 2014 leaks were 42
yards apart and the current leak is approximately 2/3 mile from the previous two leaks.
 Vortex shedding induced vibrations on subsea pipelines and/or excessive bending of
unsupported pipeline spans is a known integrity threat for pipelines within the waters of
the Cook Inlet. Both phenomena are generally associated with unsupported pipeline
spans. Water currents can potentially scour the supporting seabed below pipelines,
causing unsupported pipeline spans. If the length of an unsupported pipeline span is
great enough, excessive bending and/or vortex shedding induced vibrations (causing
abrasion from relative movement or cyclical loading of the pipe) can impact the integrity
of the pipeline. Subsea pipeline operators in Cook Inlet typically monitor subsea
pipelines (both hazardous liquid and natural gas pipelines) annually to identify pipeline
spans that are unsupported by the seabed and, if necessary, investigate and provide
additional support in these areas.



 The “A Pipeline” and the “B Pipeline” have substantially similar pipeline characteristics
and operate in substantially similar environmental conditions. Although the cause of the
ongoing leak on the “A Pipeline” is unknown, past leaks on the pipeline have occurred
due to outside forces, e.g. vibration, vortex shedding, excessive bending, or rock
impingement. Accordingly, it is reasonable to conclude that similar conditions are also
present on the “B Pipeline”.
 The extreme and dynamic environmental conditions within the Cook Inlet and the nature
of the risk conditions on the “A Pipeline” and “B Pipeline” present an elevated likelihood
that the risk conditions identified are already present or could develop on multiple areas
of the Affected Pipeline Facility.
 The three leaks on the “A Pipeline” since 2014 demonstrate the potential that other areas
of the MGS pipeline, including the Affected Pipeline Facility, could be impacted.
 If a leak or rupture of “B Pipeline” occurred, the environmental damage has the potential
to be significantly greater than the presently-known environmental damage from the leak
occurring on the “A Pipeline”. In addition, if a leak or rupture on the “B Pipeline”
occurred during the winter season, Hilcorp’s oil spill response capabilities could be
significantly hampered by the sea ice, weather conditions, and the Cook Inlet’s extreme
tides and currents.
 The “B Pipeline” is not In-Line Inspection (ILI) compatible because of piping associated
with a manifold sled that is positioned on the sea-floor at the base of the “A Platform.”
 Hilcorp indicates that the “B Pipeline” was successfully pressure tested in 2005, 2010,
and 2015.
 The annual side-scan sonar or multi-beam echo-sounder survey, or both, that Hilcorp
currently performs do not provide sufficient information to determine whether there are
external loads on the pipe, eroded pipe, rock impingements, metal loss, dents, gouges,
dielectric coating deterioration, and/or missing one-inch-thick concrete weight coating.
However, it is noted that Hilcorp does conduct diver-based inspections, with inspection
locations based on the annual side-scan sonar and/or multi-beam echo-sounder surveys.
Proposed Issuance of Safety Order
Section 60117(l) of Title 49, United States Code, provides for the issuance of a safety order, after
reasonable notice and the opportunity for a hearing, requiring corrective measures, which may
include physical inspection, testing, repair, or other action, as appropriate. The basis for making
the determination that a pipeline facility has a condition or conditions that pose a pipeline
integrity risk to public safety, property, or the environment is set forth both in the above-
referenced statute and 49 C.F.R. § 190.239, a copy of which is enclosed.
After evaluating the foregoing preliminary findings of fact and considering the age of the pipe
involved, the hazardous nature of the product transported and the pressure required for



transporting such product, the characteristics of the geographical areas where the pipeline facility
is located, the environmentally sensitive area with endangered and threatened species marine life
in and around the location of the leak, and the likelihood that the conditions could worsen or
develop on other areas of the pipeline and potentially impact its serviceability, PHMSA finds
that the Affected Pipeline Facility has conditions that, without corrective measures, pose a
pipeline integrity risk to public safety, property, and the environment.
Accordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the
proposed issuance of a safety order and to propose that Hilcorp take measures specified herein to
address the potential risk.
Proposed Corrective Measures
Pursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to Hilcorp
Alaska, LLC, a safety order incorporating the following remedial requirements with respect to
the “Affected Pipeline Facility.”
Definitions:
The Affected Pipeline Facility means the 8-inch-diameter “B Pipeline” and consists of the
following four sections: 1) MGS onshore facility to “A Platform;” 2) “A Platform” to “Baker
Platform;” 3) “A Platform” to “C Platform,” and 4) “C Platform” to “Dillon Platform.”
Proposed Actions:
1. The Affected Pipeline Facility must be externally inspected to assess the safety of its
continued operation within 21 calendar days from the issuance of a final Safety Order.
Hilcorp must send to the Director, Western Region (Director), for approval, the results
from its inspection of the Affected Pipeline Facility within three (3) calendar days after
the inspection required by this paragraph is complete. The inspection required by this
paragraph must include the following:
a. Hilcorp must conduct high-resolution side-scan sonar inspection, or equivalent
technology, the use of which is expressly approved in writing by the Director, of
the “B Pipeline” to identify pipeline sections that are not adequately supported
and to prevent excessive bending or current-induced vibrations that may damage
the pipeline.
For areas where the pipeline is not continuously supported by the seabed
(unsupported span) for 10 feet or more and the gap between the seabed and
pipeline is one foot or more, Hilcorp must inspect the pipeline by diver, or
equivalent, to identify pipeline surfaces that lack a one-inch-thick concrete weight
coating. On pipeline surfaces without intact concrete weight coating, Hilcorp
must inspect exposed pipeline surfaces to determine the condition of the dielectric
coating and to check for the presence of dents, gouges, metal loss, or other
anomalies.
b.



2. 3. 4. 5. c. If Hilcorp is unable to inspect the Affected Pipeline Facility as required by this
paragraph within 21 calendar days from the issuance of a final Safety Order, or
the Director determines, based on a review of the results of the inspection, that the
continued operation of the Affected Pipeline Facility poses a pipeline integrity
risk to public safety, property, or the environment, then the Affected Pipeline
Facility must be shut down and purged within seven (7) calendar days from
receipt of written notice by the Director.
d. If the Affected Pipeline Facility is to be shut down and purged pursuant to this
paragraph, Hilcorp must submit a purging plan to the Director, Western Region
(Director), for approval, within three (3) calendar days after the Director’s written
notice.
Hilcorp must purge and clean the Affected Pipeline Facility sections that are inactive,
such that if the wall of the inactive pipeline sections on the Affected Pipeline Facility are
perforated, hazardous material will not release into the environment.
Hilcorp must notify responders from the United States Coast Guard, the Environmental
Protection Agency, ADEC, the Alaska Department of Natural Resources, and the Cook
Inlet Spill Prevention and Response, Incorporated, at least 48 hours prior to commencing
any purging operations on the Affected Pipeline Facility.
Hilcorp must develop and implement a “Modification and Inspection Plan” for the
Affected Pipeline Facility. Hilcorp must submit the plan to the Director for approval no
later than 45 days from the issuance of a final Safety Order. At a minimum, the plan
must include the following for the “B Pipeline:”
a. Hilcorp must modify the “B Pipeline” to accommodate the use of ILI methods or
alternative technologies approved by the Director. Hilcorp must conduct an ILI or
alternative technology referenced above on the “B Pipeline” and make all necessary
repairs by September 30, 2018. The ILI results, and documentation of all subsequent
associated repairs, must be sent to the Director within 30 days of receipt of the report
by Hilcorp and 30 days following completion of each repair.
b. Hilcorp must again conduct the external inspection and evaluation methods required
by paragraphs 1a and 1b in the summer of 2018 to ensure continued pipeline support
and integrity.
Hilcorp must conduct a review and modify, as appropriate, its oil spill response plan6
(OPA Plan) in light of the environmental barriers and restraints, or both (e.g., response
capabilities during ice covered conditions), as experienced during its response to the leak
on the “A Pipeline.” Hilcorp must conduct the review and make appropriate
modifications to its OPA Plan required by this paragraph prior to November 1, 2017.
Hilcorp must submit its modified OPA Plan for review and approval to David Lehman,
6 As required under the Oil Pollution Act of 1990 (OPA), 33 U.S.C. § 2701 et seq.



Director, Oil Spill Preparedness and Emergency Support Division, Office of Pipeline
Safety, upon completion of the requirements of this paragraph.
6. Hilcorp must provide the Director with documentation of compliance and supporting
data, to all Items above.
7. If the Affected Pipeline Facility is shut down for any reason, Hilcorp must develop a
start-up plan for the Affected Pipeline Facility. The plan required by this paragraph must
be submitted to the Director for approval at least two weeks prior to the requested start-
up date.
8. Hilcorp must revise all plans identified in Items 1, 4, and 7 above, as necessary, to
incorporate new information obtained during the evaluations and associated remedial
activities. Hilcorp must submit any such plan revisions to the Director for prior approval.
The Director may approve plan elements incrementally. The plans identified in Items 1,
4, and 7 above, once approved by the Director, will be incorporated by reference into any
final Safety Order issued by PHMSA.
9. Hilcorp may only implement the plans identified in Items 1, 4, and 7 above, only after
they have been approved, in writing, by the Director, including any revisions to the
plan(s).
10. Hilcorp must submit quarterly reports to the Director that: (1) include analysis of all
available data and results of the testing and evaluations required by the safety order; and
(2) describe the progress of the repairs and other remedial actions being undertaken. The
first report will be due 45 days from issuance of a final Safety Order.
11. The Director may grant an extension of time for compliance with any of the terms of the
final Safety Order upon a written request timely submitted demonstrating good cause for
an extension.
12. Respondent may appeal any decision of the Director to the Associate Administrator for
Pipeline Safety. Decisions of the Associate Administrator will be final.
The actions proposed by this Notice of Proposed Safety Order are in addition to and do not
waive any requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190
through 199, under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et
seq., or under any other provision of Federal or state law.
After receiving and analyzing additional data in the course of this proceeding and
implementation of the work plan, PHMSA may identify other safety measures that need to be
taken. In that event, Respondent will be notified of any proposed additional measures and, if
necessary, amendments to the work plan or safety order.
Response to this Notice



In accordance with § 190.239, you have 30 days following receipt of this Notice to submit a
written response to the Director. If you do not respond within 30 days, this constitutes a waiver
of your right to contest 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
Safety Order. In your response, you may indicate that you intend to comply with the terms of the
Notice as proposed, or you may request that an informal consultation be scheduled (you will also
have the opportunity to request an administrative hearing before a final Safety Order is issued).
Informal consultation provides you with an opportunity to explain the circumstances associated
with the risk conditions alleged in the Notice and, as appropriate, to present a proposal for a
work plan or other remedial measures, without prejudice to your position in any subsequent
hearing.
If you and PHMSA agree within 30 days of informal consultation on a plan and schedule for you
to address each identified risk condition, the parties may enter into a written consent agreement,
in which case PHMSA would then issue an administrative Consent Order incorporating the terms
of the agreement. If a consent agreement is not reached, or if you have elected not to request
informal consultation, you may request an administrative hearing in writing within 30 days
following receipt of the Notice or within 10 days following the conclusion of an informal
consultation that did not result in a consent agreement, as applicable. Following a hearing, if the
Associate Administrator finds the facility to have a condition that poses a pipeline integrity risk
to the public, property, or the environment in accordance with § 190.239, the Associate
Administrator may issue a final Safety Order.
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).
In your correspondence on this matter, please refer to CPF No. 5-2017-6006S for each document
you submit, please provide a copy in electronic format whenever possible.
__________________________________ __________________
Chris Hoidal Date Issued
Director, Western Region
Pipeline and Hazardous Materials Safety Administration

520176006S_Region Withdrawal of Notice Letter_02012019_text.pdf

VIA FACSIMILE TO (907) 777-8301 AND CERTIFIED MAIL
February 1, 2019
Mr. Greg Lalicker
Chief Executive Officer
Hilcorp Alaska, LLC
1111 Travis Street
Houston, Texas 77002
RE: Withdrawal of Notice of Proposed Safety Order
CPF No. 5-2017-6006S
Dear Mr. Lalicker:
On March 17, 2017, Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued a Notice of Proposed Safety Order (Notice) with respect to Hilcorp Alaska, LLC
(Hilcorp) Middle Ground Shoal (MGS) Hazardous Liquid System located in Cook Inlet,
Alaska. Hilcorp submitted a letter to PHMSA on April 13, 2017 requesting an informal
consultation, per 49 CFR § 190.239(b)(2), regarding the Notice. On May 9, 2017, PHMSA
and Hilcorp personnel and attorneys met at PHMSA’s Anchorage, Alaska office to discuss the
Notice. During the meeting, PHMSA requested certain information and documents regarding
the operations of the MGS platforms and the B pipeline at issue in the Notice. Subsequent to
the May 9, 2017 meeting, PHMSA and Hilcorp agreed to an extended informal consultation
period during which PHMSA reviewed pertinent information regarding the regulatory
classification of the MGS Hazardous Liquid System (as well as other facilities located within
the water of the Cook Inlet).
The MGS Hazardous Liquid System’s pipeline is identified in the Notice as the “B Pipeline”
and consists of the following four sections: 1) the MGS onshore facility to the “A Platform”;
2) the “A Platform” to the “Baker Platform”; 3) the “A Platform” to the “C Platform”; and 4)
the “C Platform” to the “Dillon Platform”. All four of these segments collectively make up
the MGS “B Pipeline” and are identified in the Notice issued on March 17, 2017 as the
“Affected Pipeline Facility”. PHMSA has now determined that two of the pipelines identified
in the Notice meet a regulatory exemption, 49 CFR § 195.1(b)(5), and are therefore exempt
from PHMSA’s regulations under 49 CFR Part 195. These two hazardous liquids pipeline
segments, the MGS onshore facility to the “A Platform”, and the “A Platform” to the “C
Platform” (collectively referred to herein as the Exempt Pipelines), are subject to the Alaska
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Department of Environmental Conservation’s (ADEC) regulatory oversight.1 The remaining
two pipelines identified in the Notice remain PHMSA-regulated pipelines.
Regarding the two PHMSA-regulated pipelines identified in the Notice, information obtained
by PHMSA since the Notice was issued revealed that the “A Platform” to the “Baker
Platform” pipeline segment was converted to natural gas service prior to issuance of the
Notice. It is PHMSA’s understanding that this pipeline segment is out-of-service and filled
with seawater, but has not been abandoned pursuant to 49 CFR § 192.727. Therefore, the “A
Platform” to the “Baker Platform” pipeline segment remains a PHMSA-regulated natural gas
pipeline subject to inspection by PHMSA personnel. The final pipeline segment identified in
the Notice, the “C Platform” to the “Dillon Platform” was an out-of-service hazardous liquids
pipeline prior to issuance of the Notice. This pipeline segment has been cleaned but it has not
been abandoned pursuant to 49 CFR § 195.59, and it was a PHMSA-regulated hazardous
liquids pipeline when it was removed from service. Therefore, the “C Platform” to the
“Dillon Platform” pipeline segment remains a PHMSA-regulated hazardous liquids pipeline
subject to inspection by PHMSA personnel.
With regard to the proposed corrective measures in the Notice, Hilcorp has conducted high-
resolution side-scan sonar inspections of all pipelines identified in the Notice. In addition,
Hilcorp has modified the two Exempt Pipelines such that they are now capable of in-line
inspection (ILI) and has performed ILI of the Exempt Pipelines.
It is PHMSA’s expectation that prior to returning either of the two out-of-service pipelines
back into service, the Return to Service Plan include, among other things, modifying the
pipelines such that they are capable of ILI and that the pipelines be ILI’d prior to being
returned to service.
This letter is to inform you that PHMSA hereby withdraws the Notice and that the case is now
closed.
If you have any questions concerning this letter, please contact Mr. David Hassell, Alaska
Office Operations Supervisor, at (907) 271-6519.
Sincerely,
Chris Hoidal
Acting Director, Western Region
Pipeline and Hazardous Materials Safety Administration
1 These two pipelines meet the statutory definition of Transportation-Related Oil Flow Lines, as defined by 49
USC § 60102(o).
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cc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS
Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS
David S. Wilkins, Senior Vice President, Alaska
Erin McKay, Regulatory Compliance Manager Alaska Integrity Group
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