# HILCORP ALASKA, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 520192001
- **title:** HILCORP ALASKA, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2019-01-24
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 191.17(a).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520192001.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520192001.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520192001
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520192001
**body:**

Notice of Probable Violation involving HILCORP ALASKA, LLC. PHMSA's enforcement data identifies the cited regulation as 191.17(a). The case was opened on 2019-01-24 and is reported as closed as of 2025-06-02. Proposed civil penalty: $198,700. Assessed civil penalty: $0. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520192001_Closure Letter_06022025_(16-152926S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_Closure%20Letter_06022025_(16-152926S).pdf

520192001_Closure Letter_06022025_(16-152926S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_Closure%20Letter_06022025_(16-152926S)_text.pdf

520192001_Consent Agreement and Order_05182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_Consent%20Agreement%20and%20Order_05182020.pdf

520192001_Consent Agreement and Order_05182020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_Consent%20Agreement%20and%20Order_05182020_text.pdf

520192001_NOPV PCP PCO_01242019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_NOPV%20PCP%20PCO_01242019.pdf

520192001_NOPV PCP PCO_01242019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_NOPV%20PCP%20PCO_01242019_text.pdf

520192001_Operator Response to Notice and Request for Hearing and Preliminary Statement of Issues_02222019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192001/520192001_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing%20and%20Preliminary%20Statement%20of%20Issues_02222019.pdf

520192001_Closure Letter_06022025_(16-152926S)_text.pdf

VIA ELECTRONIC MAIL TO: lsaugier@hilcorp.com
June 2, 2025
Mr. Luke Saugier
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Drive
Suite 1400
Anchorage, Alaska 99503
CPF 5-2019-2001; 5-2019-2002W
Closure Letter
Dear Mr. Saugier:
On May 18, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
a Consent Order incorporating the terms of a Consent Agreement between PHMSA and Hilcorp
Alaska LLC (Hilcorp) related to the jurisdictional status and regulatory classification of certain
natural gas and hazardous liquid pipelines in Upper Cook Inlet of Alaska (Covered Pipelines).
The Consent Order and Consent Agreement (Agreement) required Hilcorp to bring the Covered
Pipelines into Hilcorp’s regulatory compliance programs through the Compliance Plan agreed to
by PHMSA and Hilcorp.
In a February 18, 2025 letter to PHMSA, Hilcorp stated that it had met the terms of the
Compliance Plan and requested termination of the Agreement consistent with Section XI
Termination of the Agreement.
PHMSA has reviewed compliance documents provided by Hilcorp and records from inspections
that PHMSA has conducted during the pendency of the Consent Order and Consent Agreement.
Based on the results of that review, this case is now closed, and no further action is contemplated
with respect to the matters involved in this case. PHMSA notes that under Section XII Survival
of the Agreement, notwithstanding closure of this case, Hilcorp will maintain the regulatory
classifications of the Covered Pipelines and parts of the Compliance Plan absent a change in law,
regulation, or operational status.



Thank you for your cooperation in this matter.
Sincerely,
Dustin Hubbard
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
cc: PHP-60 Compliance Registry
PHP-500 J. Gano (#16-152926S)

520192001_Consent Agreement and Order_05182020_text.pdf

May 18, 2020
VIA ELECTRONIC MAIL TO: dwilkins@hilcorp.com
Mr. David S. Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 1400
Anchorage, Alaska 99503
CPF Nos. CPF 5-2019-2001; 5-2019-2002W
Dear Mr. Wilkins:
Enclosed please find a Consent Order incorporating the terms of the Consent Agreement between
the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Hilcorp Alaska, LLC,
which was executed on May 18, 2020. Service of the Consent Order and Consent Agreement by
electronic mail is deemed effective upon the date of transmission as provided under 49 C.F.R.
§ 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure: Order, Consent Agreement, and Compliance Plan
cc: Mr. Dustin Hubbard, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, PHMSA
Mr. David Hassell, Operations Supervisor, Western Region – Alaska, PHMSA
Ms. Denali Kemppel, General Counsel, Hilcorp Alaska, LLC, dkemppel@hilcorp.com
Mr. Justin Furnace, Vice President, Government and Public Affairs, Hilcorp Energy
Company, jfurnace@hilcorp.com
Mr. James Curry, Outside Counsel, Babst Calland, jcurry@babstcalland.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
)
)
Hilcorp Alaska, LLC, ) CPF Nos. 5-2019-2001;
) 5-2019-2002W
Respondent. )
____________________________________)
CONSENT ORDER
By letter dated January 24, 2019, the Pipeline and Hazardous Materials Safety Administration
(PHMSA), Office of Pipeline Safety, issued a Notice of Probable Violation (Notice) to Hilcorp
Alaska, LLC (Hilcorp or Respondent). By letter dated January 25, 2019, PHMSA issued a
Warning Letter to Respondent.1
In accordance with 49 C.F.R. § 190.239, the Notice alleged that Hilcorp reported the Middle
Ground Shoal (MGS) gas pipeline system located in the waters of the Upper Cook Inlet as
onshore, rather than offshore transmission mileage, in its 2015 Annual Report. The Director
proposed a civil penalty of $198,700 for this alleged violation and proposed that the Respondent
take certain corrective measures to remedy the alleged violation. Also, on January 25, 2019, the
Director issued a Warning Letter (Warning) to Hilcorp alleging nine probable violations of the
pipeline safety regulations with regard to the MGS system.
In response to the Notice and Warning Letter, Respondent timely requested a hearing and an
informal discussion concerning potential settlement of the dispute. The parties subsequently
engaged in good-faith settlement discussions that have resulted in the Consent Agreement and
Compliance Plan attached to this Consent Order that settles all of the allegations in the Notice
and Warning Letter.
Accordingly, the Consent Agreement and Compliance Plan is hereby approved and incorporated
by reference into this Consent Order. The Respondent is hereby ordered to comply with the
terms of the Consent Agreement, effective immediately.
Pursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the
assessment of civil penalties of up to $200,000, as adjusted for inflation (see 49 C.F.R.
§ 190.223), for each violation for each day the violation continues or in referral to the Attorney
General for appropriate relief in a district court of the United States.
1 Pursuant to 49 C.F.R. § 190.205, Warning Letters are not adjudicated. However, in this case, resolution of the
Warning Letter is specifically referenced in the Consent Agreement and is therefore referenced in this Order as well.



The terms and conditions of this Consent Order are effective upon service in accordance with
49 C.F.R. § 190.5.
_____________________________ ________________________
Alan K. Mayberry Date
Associate Administrator
For Pipeline Safety



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
In the Matter of )
) CPF Nos. 5-2019-2001;
Hilcorp Alaska, LLC, ) 5-2019-2002W
Respondent. )
)
)
)
SETTLEMENT AGREEMENT
Starting in 2015, Hilcorp Alaska, LLC (Hilcorp or Respondent) and the Pipeline and Hazardous
Materials Safety Administration (PHMSA) (collectively, the Parties) began discussing the
jurisdictional status and regulatory classification of Hilcorp’s pipelines in and around the Upper
Cook Inlet. Hilcorp raised this issue with PHMSA and sought clarity on the status of these assets
after acquiring them from a number of other operators. Hilcorp maintained that certain assets
located within the waters of the Upper Cook Inlet were exempt from the regulatory requirements
of 49 C.F.R. Parts 192 and 195. PHMSA informed Hilcorp that it disagreed with that position and
maintained that the assets were subject to PHMSA’s regulatory oversight.
On October 31, 2018, PHMSA issued a report titled “Inventory of Upper Cook Inlet Pipeline
Facilities and Identification of Regulators” (Inventory). The Inventory identified federal and state
agencies with regulatory authority over pipelines located in the waters of the Upper Cook Inlet,
listed current pipeline operators and assets in those waters, and made statements regarding
PHMSA’s views concerning the jurisdictional status of the assets.
On January 24, 2019, the Director, Western Region, PHMSA Office of Pipeline Safety, (Director)
issued a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order
(Notice) to Hilcorp. The Notice alleged that Hilcorp reported the Middle Ground Shoal (MGS)
gas pipeline system located in the waters of the Upper Cook Inlet as onshore, rather than offshore
transmission mileage, in its 2015 Annual Report. The Director proposed a civil penalty of
$198,700 for this alleged violation and proposed that the Respondent take certain corrective
measures to remedy the alleged violation. Also, on January 25, 2019, the Director issued a
Warning Letter (Warning) to Hilcorp alleging nine probable violations of the pipeline safety
regulations with regard to the MGS system.
On January 25, 2019, Hilcorp filed a Petition for Review in the United States Court of Appeals for
the D.C. Circuit, No. 19-1016, challenging PHMSA’s statements of jurisdiction and regulatory
oversight in the Inventory (Petition).
Hilcorp timely responded to the Notice and Warning, contested that the pipeline in question was
properly classified as “offshore”, and requested a hearing and an informal discussion concerning
Page 1 of 12



potential settlement of the dispute. The Parties have reached an agreement that settlement of these
proceedings will avoid further administrative proceedings or litigation, that entry into this
Settlement Agreement (Agreement) is the most appropriate means of resolving the issues raised in
the Notice, and addressing any findings from PHMSA inspections of the Covered Pipelines
(defined below) that occurred before the Effective Date of this Agreement, and that the Agreement
is in the public interest. Therefore, pursuant to 49 C.F.R. Part 190, without adjudication of any
issue of fact or law, and upon consent and agreement of Hilcorp and PHMSA, the Parties agree as
follows:
I. General Provisions
Acknowledgements. Hilcorp acknowledges that as of the Effective Date of this
Agreement Hilcorp, as the operator of certain pipeline facilities that transport hazardous liquids
and natural gas in the Upper Cook Inlet, is subject to the jurisdiction of the Federal Pipeline Safety
Laws, 49 U.S.C. § 60101, et seq., and the regulations and administrative orders issued thereunder.
Specifically, Respondent acknowledges the following:
a. The Submerged Gathering Pipelines, Out-of-Service Pipelines, and the Kenai
Katchemak Pipeline as defined in Table 1 of this Agreement, are subject to the
jurisdiction of the Federal Pipeline Safety Laws, 49 U.S.C. § 60101, et seq., and
the regulations and administrative orders issued thereunder.
b. The Onshore Gathering Pipeline as defined in Table 1 of this Agreement as the
West Cook Inlet Gas Gathering System, is subject to the jurisdiction of the Federal
Pipeline Safety Laws, 49 U.S.C. § 60101, et seq., and the regulations and
administrative orders issued thereunder, but only with regard to the portions of that
pipeline that qualify as a regulated gathering line under PHMSA’s gas gathering
regulations.
c. For purposes of this Agreement, Hilcorp acknowledges that it received proper
notice of PHMSA’s actions in these proceedings.
Scope of this Agreement. This Agreement applies to Respondents’ Submerged
Gathering Pipelines, Kenai Katchemak Pipeline and the regulated portions of the Onshore
Gathering Pipeline (“Covered Pipelines”) as defined in Table 1 of this Agreement. This
Agreement also creates separate requirements applicable to the Out-of-Service Pipelines, as
defined in Table 1 of this Agreement, which are set out in Section II of the Compliance Plan –
Plan for Out of Service Pipeline Facilities. This Agreement does not apply to Respondent’s
unregulated Production Pipelines, the unregulated portions of the Onshore Gathering Pipeline
as defined in Table 1 of this Agreement, or the unregulated Dolly Varden C pipeline, as the Parties
agree that these pipelines are not subject to PHMSA’s jurisdiction. The Agreement does not apply
to any other assets not specifically identified in this Agreement.
Page 2 of 12



Table 1
Submerged Gathering Pipelines
Pipeline Name
Pipeline Description
Pipeline Regulatory
Classification
Monopod A
8-inch oil pipeline from
Regulated Offshore
Monopod Platform to Trading
Gathering
Bay Production Facility
(TBPF)
Dolly Varden A
8-inch oil pipeline from Dolly
Regulated Offshore
Varden Platform to TBPF
Gathering
Anna A
8-inch oil pipeline from Anna Regulated Offshore
Platform to Bruce Platform
Gathering
Bruce GP-1
6-inch oil pipeline from
Regulated Offshore
Bruce Platform to Granite
Gathering
Point Tank Farm (GPTF)
Granite Point B
8-inch oil pipeline from
Regulated Offshore
Granite Point Platform (GPP)
to GPTF
Gathering
Steelhead B
10-inch gas pipeline from
Regulated Offshore
Steelhead Platform to TBPF
Gathering
Monopod B
8-inch gas pipeline from
Regulated Offshore
TBPF to Monopod Platform
Gathering
Dolly Varden B
8-inch gas pipeline from
Regulated Offshore
TBPF to Dolly Varden
Gathering
Platform
Grayling B
10-inch gas pipeline from
Regulated Offshore
TBPF to Grayling Platform
Gathering
King Salmon B
8-inch gas pipeline from
Regulated Offshore
TBPF to King Salmon
Gathering
Platform
Anna B
8-inch gas pipeline from
Regulated Offshore
Bruce Platform to Anna
Gathering
Platform
Bruce GP-2
6-inch gas pipeline from
Regulated Offshore
GPTF to Bruce Platform
Gathering
Granite Point A
8-inch gas pipeline from
Regulated Offshore
GPTF to GPP
Gathering
2 As used in this Agreement, Submerged Gathering Pipelines refers only to the submerged portions of the pipelines
listed in Table 1. The Parties recognize that there are relatively short, onshore portions of the Submerged Gathering
unregulated gas gathering lines under 49 C.F.R. § 192.8. The onshore portions of the liquid Submerged Gathering
Pipelines listed in Table 1. The onshore portions of the gas Submerged Gathering Pipelines are currently Class 1
§ 195.11.
Pipelines are all rural gathering lines that do not meet the definition of regulated rural gathering line in 49 C.F.R.
Page 3 of 12



Spark B
6-inch gas pipeline from
Regulated Offshore
Granite Point Production
Gathering
Facility (GPPF) to Spark
Platform
Spark Spurr Intertie
6-inch gas pipeline from
Regulated Offshore
Spark Platform to Spurr
Gathering
Platform
Out-of-Service Pipelines
Pipeline Name
Pipeline Description
Pipeline Regulatory
Classification
Dillon B
8-inch oil pipeline from
Out of Service
Platform C to Dillon Platform
Dillon D
8-inch gas pipeline from
Out of Service
Dillon to East Foreland
Facility
Baker A
8-inch gas pipeline from
Out of Service
Baker Platform to Platform
A.
Spurr Gas
6-inch gas pipeline from
Out of Service
Spurr Platform to GPPF
Spurr Oil
6-inch oil pipeline from Spur Out of Service
Platform to GPPF
Steelhead A
10-inch gas pipeline from
Out of Service
Steelhead Platform to TBPF
Kenai Katchemak Pipeline (KKPL)
Pipeline Name
Pipeline Description
Pipeline Regulatory
Classification
Kenai Katchemak Pipeline
12-inch gas pipeline that
Gas transmission
originates at the KKPL Tie-ln
Pad and terminates at the
Kenai Gas Field 33-30 Pad.
Onshore Gathering Pipeline
Pipeline Name
Pipeline Description
Pipeline Regulatory
Classification
West-Cook Inlet Gas
16-inch gas pipeline from the | Onshore Gathering (Class 1
Gathering System (W-
TBPF to the terminus at a tie- unregulated)
CIGGS)
Page 4 of 12



in with the Beluga gas
transmission pipeline
Production Pipelines
Pipeline Name
Pipeline Description
Pipeline Regulatory
Classification
Grayling A
10-inch oil pipeline from
Production
Grayling Platform to TBPF
King Salmon A
8-inch oil pipeline from King
Production
Salmon Platform to TBPF
Steelhead C
8-inch oil pipeline from
Production
Steelhead Platform to TBPF
Platform A - B1
8-inch oil pipeline from
Production
Platform A to East Foreland
Facility
Platform C - B2
8-inch oil pipeline from
Production
Platform C to Platform A
Happy Valley
6-inch gas pipeline from
Production
Happy Valley Pad B to
Happy Valley Pad A and then
to KKPL Tie-In Pad
Paxton
8-inch gas pipeline from
Production
Paxton Pad to KKPL
Susan Dionne
8-inch gas pipeline from
Production
Susan Dionne to KKPL
Ninilchik State
8-inch gas pipeline from
Production
Ninilchik State Pad to KKPL
George Oskoloff (GO)
8-inch gas pipeline from GO
Production
Pad to KKPL
Bartolowits
6-inch gas pipeline from
Production
Bartolowits Pad to KKPL
Falls Creek
8-inch gas pipeline from Falls
Production
Creek Pad to KKPL
Kasilof Extension
6-inch gas pipeline from
Production
Bartolowits Pad to KKPL
Respondent agrees to complete the actions specified in Attachment A to this
Agreement (Compliance Plan) and to abide by the terms of this Agreement. The Compliance
Plan is incorporated by reference into this Agreement. This Agreement does not constitute a
finding of violation of any law or regulation and may not be used in any civil, criminal, or
administrative proceeding of any kind as evidence or proof of any fact, fault or liability, or as
evidence of the violation of any law, rule, regulation or requirement, except in a proceeding to
enforce the provisions of this Agreement.
Page 5 of 12



After Respondent returns this signed Agreement to PHMSA, the Agency’s
representative will present it to the Associate Administrator for Pipeline Safety, recommending
that the Associate Administrator adopt the terms of this Agreement by issuing a Consent Order
pursuant 49 C.F.R. § 190.219 incorporating the terms of this Agreement. The terms of this
Agreement constitute an offer of settlement until accepted by the Associate Administrator. If the
Associate Administrator accepts, the Associate Administrator will issue a Consent Order
incorporating the terms of this Agreement.
Respondent consents to the issuance of the Consent Order, and hereby waives any
further procedural requirements with respect to its issuance. Respondent waives all rights to
contest the adequacy of the Notice, or the validity of the Consent Order or this Agreement,
including all rights to administrative or judicial hearings or appeals, except as set forth herein.
This Agreement shall apply to and be binding upon PHMSA, and upon Hilcorp, its
officers, directors, and employees, and its successors, assigns, or other entities or persons
otherwise bound by law. Hilcorp agrees to provide a copy of this Agreement and any incorporated
work plans and schedules to all of Hilcorp’s officers, employees, and agents whose duties might
reasonably include compliance with this Agreement.
For all transfers of ownership or operating responsibility of the Covered Pipelines,
Hilcorp will provide a copy of this Agreement to the prospective transferee at least 30 days prior
to such transfer. Hilcorp will provide written notice of a transfer of ownership or operating
responsibility to the Director within 30 days after such transfer. This provision shall not apply to
any of those facilities that have been abandoned in accordance with 49 C.F.R. §§ 192.727 or 195.59
at or before the time of the transfer.
This Agreement constitutes the final, complete, and exclusive agreement and
understanding between the Parties with respect to the settlement embodied in this Agreement. The
Parties acknowledge that there are no representations, agreements or understandings relating to
settlement other than those expressly contained in this Agreement.
Nothing in this Agreement affects or relieves Respondent of its responsibility to
comply with all applicable requirements of the Federal Pipeline Safety Laws, 49 U.S.C. § 60101,
et seq., and the regulations and orders issued thereunder; and nothing in this Agreement alters
PHMSA’s right of access, entry, inspection, and information gathering or PHMSA’s authority to
bring enforcement actions against the Respondent pursuant to the Federal Pipeline Safety Laws,
the regulations and orders issued thereunder, or any other provision of Federal or State law; with
the following mutual understandings regarding timing:
a. The Parties agree that, to allow Hilcorp time to integrate the Covered Pipelines into
its PHMSA compliance programs, PHMSA’s inspections of the Covered Pipelines
during the pendency of this Agreement will be limited to inspections to verify
compliance with this Agreement and to investigate and address existing or
imminent safety conditions or concerns.
Page 6 of 12



b. The Parties agree that nothing in this Agreement prevents PHMSA from
investigating a pipeline accident or incident on any Hilcorp pipeline facilities
subject to PHMSA’s jurisdiction, or employing its Corrective Action Order or
Safety Order authorities under 49 U.S.C. §§ 60112 and 60117(l), respectively.
c. The Parties agree that, in light of the challenges associated with the jurisdictional
status and regulatory classification of the Covered Pipelines, and the Parties’ long-
running discussions of the same, PHMSA will not bring enforcement actions for
alleged violations of the Pipeline Safety Laws or PHMSA’s Pipeline Safety
Regulations that may have occurred with respect to the Covered Pipelines prior to
the Effective Date.
d. The Parties agree that during the pendency of this Agreement, PHMSA will not
bring enforcement actions against Hilcorp regarding alleged violations of the
Pipeline Safety Laws or PHMSA’s Pipeline Safety Regulations that may occur with
respect to the Covered Pipelines, except that PHMSA may bring an enforcement
action with regard to alleged violations for failing to comply with the terms of this
Agreement.
e. Notwithstanding subparagraph (d) of this paragraph, the Parties agree that PHMSA
may commence normal inspection and enforcement activities for the activities
covered in the Compliance Plan on expiration of the various compliance
timeframes as set forth in the Compliance Plan.
This Agreement does not waive or modify any Federal, State, or local laws or
regulations that are applicable to Hilcorp’s pipeline systems. This Agreement is not a permit, or a
modification of any permit, under any Federal, State, or local laws or regulations. Respondent
remains responsible for achieving and maintaining compliance with all applicable Federal, State,
and local laws, regulations, and permits.
This Agreement does not create rights in, or grant any cause of action to, any third
party not party to this Agreement. The U.S. Department of Transportation is not liable for any
injuries or damages to persons or property arising from acts or omissions of Respondent or its
officers, employees, or agents carrying out the work required by this Agreement. Respondent
agrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,
and representatives from any and all causes of action arising from any acts or omissions of
Respondent or its contractors in carrying out any work required by this Agreement.
Should a change in law, regulation, or operational status of any of the pipelines
identified in Table 1 occur that may affect the jurisdictional status or regulatory classifications of
the pipeline facilities subject to this Agreement, either Party may notify the other of such potential
change, and the Parties agree to discuss any potential classification changes in good faith.
The Director may grant an extension of time for compliance with any of the terms
of this Agreement, including the Compliance Plan, upon a written request timely submitted
demonstrating good cause for an extension. Absent unexpected delays, Hilcorp will submit any
Page 7 of 12



requests for extension no less than 30 days before the applicable deadline. The Director shall
respond to any such requests within 14 business days of receipt.
II. Monetary Penalties
In consideration of the good faith nature of this Agreement, PHMSA hereby
withdraws the allegation and proposed civil penalty of $198,700 in Item 1 of the Notice for CPF
No. 5-2019-2001.
If Hilcorp commits a Material Breach of this Agreement, as defined in Paragraph
16, Hilcorp will be liable for stipulated penalties, unless a force majeure event has occurred in
accordance with Section VI (Force Majeure), according to the following provisions:
a. For each Material Breach of this Agreement, Respondent will pay $750 per day for
each instance of failure to comply for the first 15 days of noncompliance; $1000
per day for the 16th through 30th days of noncompliance; and $1,250 per day for
each day of noncompliance thereafter.
b. Stipulated penalties under this Paragraph will begin to accrue on the day after
performance is due, and shall continue to accrue through the final day of completion
of the activity.
c. Respondent will pay any stipulated penalties not more than 30 days after receipt of
written demand by PHMSA for such penalties. Federal regulations (49 C.F.R. §
89.21(b)(3)) require payments in excess of $10,000 dollars to be made by wire
transfer through the Federal Reserve Communications System (Fedwire) to the
account of the “U.S. Treasury.”
A Material Breach of this Agreement shall be the Respondent’s failure to complete
certain activities required in the Compliance Plan, as specified below, by the deadline established
in the Compliance Plan combined with a failure to obtain a time extension for such activity from
PHMSA. Should Hilcorp appeal a PHMSA decision regarding a time extension pursuant to
Paragraph 23, no Material Breach shall occur until the Associate Administrator issues a
determination with respect to that appeal. A Material Breach shall only include a failure to attempt
to perform an activity required by the Agreement or Compliance Plan, where non-performance of
that activity creates a substantial likelihood that the safety of the Covered Pipelines will be
materially degraded. A Material Breach shall not include failure to comply with reporting or
notification requirements, and shall not include ministerial or inadvertent errors or omissions in
filings made or compliance documentation prepared under this Agreement.
III. Dismissal of Petition for Review
Within five business days after the Effective Date of this Agreement, Hilcorp shall
file with the U.S. Court of Appeals for the D.C. Circuit a Stipulation to Dismiss the Petition,
pursuant to Rule 42(b) of the Circuit Rules for the District of Columbia Circuit and Rule 42 of the
Page 8 of 12



Federal Rules of Appellate Procedure, specifying that the Parties shall bear their own costs and
fees.
IV. Disposition of Warning Letter
The Parties agree that the alleged probable violations in the Warning Letter at
CPF No. 5-2019-2002W, many of which occurred before Hilcorp acquired the MGS system,
have been resolved.
V. Review and Approval Process
With respect to any submission of any document or plan required by this Agreement
that requires the approval of the Director, the Director may: (a) approve, in whole or in part, the
submission, (b) approve the submission on specified, reasonable conditions, (c) disapprove, in
whole or in part, the submission, or (d) any combination of the foregoing. The Director shall
respond within 60 days of a submission by Respondent. If the Director approves, approves in part,
or approves with conditions, Respondent will take all action as approved by the Director, subject
to Respondent's right to invoke the dispute resolution procedures in Section VII with respect to
any conditions the Director identifies. If the Director disapproves all or any portion of the
submission, the Director will provide Respondent with a written notice of the deficiencies and a
reasonable period of time to correct them. Respondent will correct all deficiencies within the time
specified by the Director and resubmit for approval. If the Director does not act on a submission
or any document or plan submitted under this paragraph within 60 days of submission, Respondent
may proceed as provided in the document or plan, as submitted.
VI. Force Majeure
Respondent agrees to perform all the terms of this Agreement within the timeframes
established under the Compliance Plan, unless performance is delayed by a force majeure. For
purposes of this Agreement, a force majeure is defined as an event arising from causes beyond the
control of the Respondent, or any entity controlled by Respondent or Respondent’s contractors,
which delays or prevents performance of any obligation under the Agreement despite
Respondent’s commercially reasonable efforts to fulfill the obligation.
If a force majeure event occurs or has occurred that may delay the performance of
any term of this Agreement beyond the approved timeframe, Respondent shall notify the Director,
in writing, within 5 business days of when Respondent knew that the event might cause a delay.
Such notice shall identify the cause of the delay or anticipated delay and the anticipated duration
of the delay; state the measures taken or to be taken to prevent or minimize the delay; and estimate
the timetable for implementation of those measures. Failure to comply with the notice provision
of this paragraph and to undertake reasonable efforts to avoid and minimize the delay shall waive
any claim of force majeure by Respondent.
If the Director determines, upon notification by Respondent, that a delay or
anticipated delay in performance is or was attributable to a force majeure, then the Director will
extend the time period for the performance of that term for a reasonable period. The Director will
Page 9 of 12



notify Respondent, in writing, of the length of any extension of performance of such terms affected
by the force majeure. Any such extensions shall not alter Respondent's obligation to perform or
complete other terms of this Agreement which are not affected by the force majeure.
VII. Dispute Resolution
The Director and Hilcorp will informally attempt to resolve any disputes arising
under this Agreement, including but not limited to any decision of the Director. If Hilcorp and the
Director are unable to informally resolve the dispute within 15 calendar days, Hilcorp may request
in writing, within 10 calendar days of any failed attempt at informal resolution, a written
determination resolving the dispute from the Associate Administrator for Pipeline Safety,
PHMSA. Along with its request, Hilcorp will provide the Associate Administrator with all
information Hilcorp believes is relevant to the dispute. If the request is submitted as provided
herein, the Associate Administrator will issue a final determination in writing within 30 calendar
days. Decisions of the Associate Administrator under this paragraph will constitute final agency
action subject to judicial review. The existence of a dispute and PHMSA’s consideration of
matters placed in dispute will not excuse, toll, or suspend any term or timeframe for completion
of any work to be performed under this Agreement during the pendency of the dispute resolution
process, except as agreed by the Director or the Associate Administrator in writing, or ordered by
a court of competent jurisdiction.
VIII. Recordkeeping and Information Disclosure
Unless otherwise required in this Agreement, Hilcorp agrees to maintain records
demonstrating compliance with all requirements of this Agreement for a period of at least five
years following completion of the Compliance Plan, or as otherwise required by law or regulation,
whichever period is longer.
For any reports, plans, or other deliverables required to be submitted to PHMSA
pursuant to this Agreement, Respondent may assert a claim of business confidentiality or other
protections applicable to the release of information by PHMSA, covering part or all of the
information required to be submitted to PHMSA pursuant to this Agreement in accordance with
49 C.F.R. Part 7 and 49 C.F.R. § 190.343. PHMSA determines release of any information
submitted pursuant to this Agreement in accordance with 49 C.F.R. Part 7, the Freedom of
Information Act, 5 U.S.C. § 552, DOT and PHMSA policies, and other applicable regulations and
Executive Orders.
IX. Effective Date
The term “Effective Date,” as used herein, is the date on which the Consent Order
is issued by the Associate Administrator incorporating the terms of this Agreement. Unless
specified to the contrary, all deadlines for actions required by this Agreement run from the
Effective Date of the Consent Order.
Page 10 of 12



X. Modification
The terms of this Agreement may be modified only by mutual agreement of the
Parties. Such modifications must be in writing and signed by both Parties. Either party may
request modification by submitting a written request to the other party.
XI. Termination
This Agreement terminates upon completion of all terms set forth in the
Compliance Plan, except as provided in paragraph 29 of this Agreement. Upon termination of
this Agreement, all Covered Pipelines shall be subject to all requirements of 49 C.F.R. Parts 190-
199, as applicable. Hilcorp may request written confirmation from PHMSA when this Agreement
is terminated and the Director will provide such confirmation. Nothing in this Agreement prevents
Hilcorp from completing any of the obligations earlier than the deadlines provided for in the
Compliance Plan.
XII. Survival.
Absent a change in law, regulation, or operational status of any Covered
Pipeline that may occur and affect the jurisdictional status or regulatory classifications of the
pipeline facilities subject to this Agreement, the acknowledgements of jurisdiction as provided
for in Paragraph 1 of this Agreement, the regulatory classification of Hilcorp’s assets as set forth
in Table 1 of this Agreement and the obligations set forth in sections I.2, I.4(g), I.4(h), and
II.1(b)-(c) of the Compliance Plan shall, consistent with their terms, survive any termination or
expiration of this Agreement and shall bind the Parties and their successors and assigns.
XIII. Ratification
The Parties’ undersigned representatives certify that they are fully authorized to
enter into the terms and conditions of this Agreement and to execute and legally bind such party
to this document.
Page 11 of 12



The Parties hereby agree to all terms and conditions of this Agreement.
For PHMSA:
May 18, 2020
Alan K. Mayberry Date
Associate Administrator for Pipeline Safety
Pipeline and Hazardous Materials Safety Administration
For Hilcorp Alaska, LLC:
May 14, 2020
David S. Wilkins Date
Senior Vice President
Hilcorp Alaska, LLC
Page 12 of 12

520192001_NOPV PCP PCO_01242019_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
January 24, 2019
Mr. Greg Lalicker
President
Hilcorp Alaska, LLC
1111 Travis Street
Houston, Texas 77002
CPF 5-2019-2001
Dear Mr. Lalicker:
On July 11 through 15, 2016 and October 26, 2016, representatives of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected your Middle Ground
Shoal natural gas transmission pipeline system near Nikiski, Alaska. We also reviewed your
operation, maintenance and emergency response procedures and supporting records at your
Nikiski and Anchorage offices.
As a result of the inspection, it is alleged that you have committed a probable violation of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The item
inspected and the probable violation is:



1. § 191.17 Transmission systems; gathering systems; and liquefied natural gas
facilities: Annual report.
(a) Transmission or Gathering. Each operator of a transmission or a gathering
pipeline system must submit an annual report for that system on DOT Form
PHMSA 7100.2.1. This report must be submitted each year, not later than
March 15, for the preceding calendar year, except that for the 2010 reporting
year the report must be submitted by June 15, 2011.
Hilcorp Alaska, LLC (Hilcorp) failed to properly report the Middle Ground Shoal (MGS)
natural gas transmission pipe located within the waters of the upper Cook Inlet as offshore
transmission mileage in its 2015 Annual Report. During the on-site records inspection at
Hilcorp's Nikiski office, Hilcorp produced an internal document that identified 16.6 miles of
8-inch gas transmission lines associated with their MGS natural gas pipeline system as
offshore; however, that same pipeline mileage recorded in the 2015 annual report as
submitted by Hilcorp on March 15, 2016 was listed as an onshore pipeline, in direct
contradiction of their own internal analysis.
Prior to September 1, 2015 the previous owner, XTO Energy Inc., had correctly reported and
categorized their 8-inch diameter transmission pipe as lying in offshore waters. Hilcorp
purchased the XTO oil and gas facilities on September 1, 2015.
The mileage associated with the purchase of the XTO facilities is required to be reported on
Hilcorp's 2015 Annual Report. Hilcorp calculated that 16.6 miles of 8-inch diameter pipe was
associated with the natural gas transmission facilities located within the waters of the Upper
Cook Inlet. The waters of the upper Cook Inlet are "offshore" under 49 C.F.R. Part 192 and
49 C.F.R. Part 195, and are required to be reported as such pursuant to § 191.17(a). Hilcorp's
2015 Annual Report does not report any offshore mileage for 8-inch diameter transmission
pipe (Part H of the Annual Report). Hilcorp's 2015 Annual Report does report 16.6 miles of
8-inch diameter pipe as onshore transmission pipe. Therefore, Hilcorp failed to properly
report the 16.6 miles of 8-inch diameter transmission pipe located within the waters of the
upper Cook Inlet as offshore transmission mileage in its 2015 Annual Report. Hilcorp’s
Regulatory Compliance Manager verified that Hilcorp had reported the mileage as "onshore".
Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to
exceed $209,002 per violation per day the violation persists, up to a maximum of $2,090,022
for a related series of violations. For violations occurring prior to November 2, 2015, the
maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty
not to exceed $2,000,000 for a related series of violations. The Compliance Officer has
reviewed the circumstances and supporting documentation involved in the above probable
violation and has recommended that you be preliminarily assessed a civil penalty of $198,700
as follows:
2



Item number PENALTY
1 $198,700
Proposed Compliance Order
With respect to item 1, pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials
Safety Administration (PHMSA) proposes to issue a Compliance Order to Hilcorp Alaska,
LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a part of
this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline
Operators in Compliance Proceedings. Please refer to thi
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