{"operation":"document","citation":"CPF 520192002W","title":"HILCORP ALASKA, LLC — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-01-25","effective_on":null,"summary":"CLOSED warning letter citing 191.15(a), 191.22(c), 191.5(a), 192.481(a), 192.605(a), 192.619, 192.739(a)(1), 192.743(a), 192.745(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520192002w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520192002w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520192002w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520192002W","body":"Warning Letter involving HILCORP ALASKA, LLC. PHMSA's enforcement data identifies the cited regulations as 191.15(a),  191.22(c),  191.5(a),  192.481(a),  192.605(a),  192.619,  192.739(a)(1),  192.743(a),  192.745(a). The case was opened on 2019-01-25 and is reported as closed as of 2019-01-25. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520192002W_Closure Letter_06022025_(16-152926S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Closure%20Letter_06022025_(16-152926S).pdf\n\n520192002W_Closure Letter_06022025_(16-152926S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Closure%20Letter_06022025_(16-152926S)_text.pdf\n\n520192002W_Consent Agreement and Order_05182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Consent%20Agreement%20and%20Order_05182020.pdf\n\n520192002W_Consent Agreement and Order_05182020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Consent%20Agreement%20and%20Order_05182020_text.pdf\n\n520192002W_Operator Response to Notice and Request for Hearing and Preliminary Statement of Issues_02222019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing%20and%20Preliminary%20Statement%20of%20Issues_02222019.pdf\n\n520192002W_Warning Letter_01252019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Warning%20Letter_01252019.pdf\n\n520192002W_Warning Letter_01252019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520192002W/520192002W_Warning%20Letter_01252019_text.pdf\n\n520192002W_Warning Letter_01252019_text.pdf\n\nWARNING LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 25, 2019\nMr. Greg Lalicker\nChief Executive Officer\nHilcorp Alaska, LLC\n1111 Travis Street\nHouston, Texas 77002\nCPF 5-2019-2002W\nDear Mr. Lalicker:\nOn July 11 through 15, 2016 and October 26, 2016, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\npursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Hilcorp Alaska, LLC’s\n(Hilcorp) Middle Ground Shoal natural gas transmission pipeline system near Nikiski, Alaska.\nWe also reviewed your operation, maintenance and emergency response procedures and\nsupporting records at your Nikiski and Anchorage offices.\nBased on our inspection findings, PHMSA determined that Hilcorp committed probable\nviolations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR).\nThe deficiencies noted and the probable violations are:\n1. §191.5(a) Immediate notice of certain incidents.\n(a) At the earliest practicable moment following discovery, each operator shall\ngive notice in accordance with paragraph (b) of this section of each incident as\ndefined in §191.3.\n\n\n\nRecords do not indicate immediate notifications of incidents were made in accordance with\n§191.5. The previous operator failed to provide notice to the National Response Center of a\nnatural gas leak on August 31, 2014, as confirmed by the Hilcorp personnel interviewed.\n2. § 191.15 Transmission systems; gathering systems; and liquefied natural gas\nfacilities: Incident report.\n(a) Transmission or Gathering. Each operator of a transmission or a gathering\npipeline system must submit DOT Form PHMSA F 7100.2 as soon as practicable\nbut not more than 30 days after detection of an incident required to be reported\nunder §191.5 of this part.\nRecords do not indicate that transmission incident reports were submitted by the previous\noperator to DOT on Form 7100.2 (01-2002) within the required timeframe. Incident reports\nwere not submitted for the June 1, 2014 and August 31, 2014 leaks on the transmission\npipeline system.\n3. § 191.22 National Registry of Pipeline and LNG Operators (OPID)\n(c) Changes. Each operator of a gas pipeline, gas pipeline facility, LNG plant or\nLNG facility must notify PHMSA electronically through the National Registry of\nPipeline and LNG Operators at http://opsweb.phmsa.dot.gov of certain events.\nHilcorp failed to submit a National Registry notification to PHMSA regarding the September\n1, 2015 purchase of the Middle Ground Shoal natural gas transmission pipeline system.\n4. § 192.481 Atmospheric corrosion control: Monitoring\n(a) Each operator must inspect each pipeline or portion of pipeline that is\nexposed to the atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is\nlocated: Then the frequency of inspection is:\nOnshore At least once every 3 calendar years, but with intervals not\nexceeding 39 months\nOffshore At least once each calendar year, but with intervals not exceeding 15\nmonths\nHilcorp could not demonstrate that all portions of the pipeline that were exposed to the\natmosphere were inspected at the required time interval. Records provided to our inspectors\ndo not adequately document inspection of aboveground pipe for evidence of atmospheric\ncorrosion. Offshore atmospheric corrosion inspections for pipeline portions located on the\nPlatform A were not conducted in 2015.\n2\n\n\n\n5. § 192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline, a manual\nof written procedures for conducting operations and maintenance activities and\nfor emergency response. For transmission lines, the manual must also include\nprocedures for handling abnormal operations. This manual must be reviewed\nand updated by the operator at intervals not exceeding 15 months, but at least\nonce each calendar year. This manual must be prepared before operations of a\npipeline system commence. Appropriate parts of the manual must be kept at\nlocations where operations and maintenance activities are conducted.\nThe operators failed to conduct a review of its emergency plans and procedures at intervals\nnot exceeding 15 months, but at least once each calendar year. The Emergency Plans and\nProcedures were reviewed on December 3, 2013 and again on November 24, 2015. The\ninterval between reviews was longer than 15 months, and no review was completed during the\n2014 calendar year.\nThe previous operator also failed to document that annual reviews of the written procedures in\nthe operations and maintenance manual were conducted as required. Hilcorp was unable to\ndemonstrate that an annual review of operations and maintenance plans and procedures had\nbeen conducted in the 2014 calendar year.\n6. § 192.619 Maximum allowable operating pressure: Steel or plastic pipelines.\n(a) No person may operate a segment of steel or plastic pipeline at a pressure\nthat exceeds a maximum allowable operating pressure determined under\nparagraph (c) or (d) of this section, or the lowest of the following:\n(1) The design pressure of the weakest element in the segment, determined in\naccordance with subparts C and D of this part. However, for steel pipe in\npipelines being converted under §192.14 or uprated under subpart K of this part,\nif any variable necessary to determine the design pressure under the design\nformula (§192.105) is unknown, one of the following pressures is to be used as\ndesign pressure:\n(i) Eighty percent of the first test pressure that produces yield under section N5\nof Appendix N of ASME B31.8 (incorporated by reference, see §192.7), reduced\nby the appropriate factor in paragraph (a)(2)(ii) of this section; or\n(ii) If the pipe is 123∕4 inches (324 mm) or less in outside diameter and is not\ntested to yield under this paragraph, 200 p.s.i. (1379 kPa).\n3\n\n\n\n(2) The pressure obtained by dividing the pressure to which the segment was\ntested after construction as follows:\n(i) For plastic pipe in all locations, the test pressure is divided by a factor of 1.5.\n(ii) For steel pipe operated at 100 p.s.i. (689 kPa) gage or more, the test pressure\nis divided by a factor determined in accordance with the following table:\nFactors1, segment—\nClass\nlocation\nInstalled before (Nov.\n12, 1970)\nInstalled after (Nov. 11,\n1970)\nConverted under\n§192.14\n1 1.1 1.1 1.25\n2 1.25 1.25 1.25\n3 1.4 1.5 1.5\n4 1.4 1.5 1.5\n1 For offshore segments installed, uprated or converted after July 31, 1977, that are not located on\nAn offshore platform, the factor is 1.25. For segments installed, uprated or converted after July\n31, 1977, that are located on an offshore platform or on a platform in inland navigable waters,\nincluding a pipe riser, the factor is 1.5.\n(3) The highest actual operating pressure to which the segment was subjected\nduring the 5 years preceding the applicable date in the second column. This\npressure restriction applies unless the segment was tested according to the\nrequirements in paragraph (a)(2) of this section after the applicable date in the\nthird column or the segment was uprated according to the requirements in\nsubpart K of this part:\nPipeline segment Pressure date —Onshore gathering line that\nfirst became subject to this\npart (other than §192.612)\nafter April 13, 2006\nMarch 15, 2006, or date\nline becomes subject to this\npart, whichever is later\nTest date\n5 years preceding\napplicable date in\nsecond column.\n—Onshore transmission line\nthat was a gathering line not\nsubject to this part before\nMarch 15, 2006\nOffshore gathering lines July 1, 1976 All other pipelines July 1, 1970 July 1, 1971.\nJuly 1, 1965.\n4\n\n\n\n(4) The pressure determined by the operator to be the maximum safe pressure\nafter considering the history of the segment, particularly known corrosion and\nthe actual operating pressure.\n(b) No person may operate a segment to which paragraph (a)(4) of this section is\napplicable, unless over-pressure protective devices are installed on the segment in\na manner that will prevent the maximum allowable operating pressure from\nbeing exceeded, in accordance with §192.195.\n(c) The requirements on pressure restrictions in this section do not apply in the\nfollowing instance. An operator may operate a segment of pipeline found to be in\nsatisfactory condition, considering its operating and maintenance history, at the\nhighest actual operating pressure to which the segment was subjected during the\n5 years preceding the applicable date in the second column of the table in\nparagraph (a)(3) of this section. An operator must still comply with §192.611.\n(d) The operator of a pipeline segment of steel pipeline meeting the conditions\nprescribed in §192.620(b) may elect to operate the segment at a maximum\nallowable operating pressure determined under §192.620(a).\nHilcorp did not properly determine the maximum allowable operating pressure (MAOP) per\n§192.619 and §192.620 for the transmission pipelines between Platform A to Platform C, and\nPlatform C to the Dillon Platform. The maximum allowable operating pressure for these\npipelines must be determined by §192.619(a), §192.619(c), or §192.619(d) requirements.\nHilcorp’s MAOP determination does not attempt to address §192.619(c) requirements.\nHilcorp has not identified these pipelines as alternative MAOP pipelines and, therefore, the\n192.619(d) requirements are not applicable. Because Hilcorp did not perform the necessary\nanalysis required to proceed under §192.619(c) or § 192.619(d), §192.619(a) requirements\ngovern. In order to meet §192.619(a) requirements, Hilcorp must select the lowest of four\nvalues determined by §§192.619(a)(1) – (a)(4). Hilcorp states that due to the lack of\ninformation, including pressure test documentation, the MAOP of these lines was determined\nby the requirements of §192.619(a)(4). This is inadequate, for without determining the\nappropriate values for §§192.619(a)(1) - (a)(3), it cannot be determined if the §192.619(a)(4)\nvalue is the lowest of the four values.\n7. § 192.739 Pressure limiting and regulating stations: Inspection and testing\n(a) Each pressure limiting station, relief device (except rupture discs), and\npressure regulating station and its equipment must be subjected at intervals not\nexceeding 15 months, but at least once each calendar year, to inspections and\ntests to determine that it is—\n(1) In good mechanical condition;\n(2) Adequate from the standpoint of capacity and reliability of operation for the\nservice in which it is employed;\nOur field inspection revealed that pressure regulating control lines were not supported in a\nmanner to prevent damage so that they maintain good mechanical condition. Control lines\n5\n\n\n\nassociated with the pressure reduction equipment (PV-1210 and PV-1211) within the\nDistribution Building were not adequately supported and therefore unsafe.\nRecords do not indicate inspection and testing of a pressure relief device as required and at\nthe specified intervals. The operators failed to inspect and test PSV-2007 at intervals not\nexceeding 15 months, but at least once each calendar year to determine its mechanical\ncondition, capacity, and reliability of operation for the service in which it is employed.\nPSV-2007 was tested on September 4, 2014, placed into service on August 24, 2015, and\nremained in service until July 6, 2016. PSV-2007 was in-service in calendar year of 2015\nwithout being inspected or tested. In addition, PSV-2007 remained in service until July 6,\n2016, which exceeded the 15 month interval.. Therefore, the PSV-2007 was in-service while\nexceeding the inspection and testing interval required by code.\n8. § 192.745 Valve maintenance: Transmission lines.\n(a) Each transmission line valve that might be required during any emergency\nmust be inspected and partially operated at intervals not exceeding 15 months,\nbut at least once each calendar year.\nDuring the inspection, Hilcorp identified two safety valves on Platform A (SDV-1810A and\nSDV-2700), and three safety valves on Platform C (FDD-1610, SDV-1600, and SDV-1610)\nthat would be required during an emergency. The prior operator of these platforms, XTO,\npreviously identified only one safety valve each on Platform A and Platform C.\nHilcorp was unable to provide a record of inspection and partial operation of the\ntransmission line valves which were located on Platform A and Platform C during the\ncalendar years: 2013, 2014, and 2015.\n9. § 192.743(a) Pressure limiting and regulating stations: Capacity of relief devices.\n(a) Pressure relief devices at pressure limiting stations and pressure regulating\nstations must have sufficient capacity to protect the facilities to which they are\nconnected. Except as provided in §192.739(b), the capacity must be consistent\nwith the pressure limits of §192.201(a). This capacity must be determined at\nintervals not exceeding 15 months, but at least once each calendar year, by\ntesting the devices in place or by review and calculations.\nRecords indicate testing or review of the capacity of each pressure relief device at each\npressure limiting station and pressure regulating station was not completed as required.\nHilcorp provided pressure relief capacity calculations/reviews dated September 10, 2010 and\nDecember 14, 2015. The September 2010 calculations/reviews were done when XTO was the\noperator, and the December 2015 calculations/reviews were done by Hilcorp. No other\ncalculations/reviews were provided. Pressure relief capacity reviews were not conducted in\nthe following calendar years: 2011, 2012, 2013, and 2014.\n6\n\n\n\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$209,002 per violation per day the violation persists, up to a maximum of $2,090,022 for a\nrelated series of violations. For violations occurring prior to November 2, 2015, the maximum\npenalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed\n$2,000,000 for a related series of violations. We have reviewed the circumstances and\nsupporting documents involved in this case, and have decided not to conduct additional\nenforcement action or penalty assessment proceedings at this time. We advise you to correct\nthe item(s) identified in this letter. Failure to do so will result in Hilcorp being subject to\nadditional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer\nto CPF 5-2019-2002W. Be advised that all material you submit in response to this\nenforcement action is subject to being made publicly available. If you believe that any\nportion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b),\nalong with the complete original document you must provide a second copy of the document\nwith the portions you believe qualify for confidential treatment redacted and an explanation of\nwhy you believe the redacted information qualifies for confidential treatment under 5 U.S.C.\n552(b).\nSincerely,\nChris Hoidal\nActing Director, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: David S. Wilkins, Senior Vice President, Alaska\nErin McKay, Regulatory Compliance Manager Alaska Integrity Group\nPHP-60 Compliance Registry\nPHP-500 M. Chard, T. Johnson (#152927)\n7\n\n520192002W_Consent Agreement and Order_05182020_text.pdf\n\nMay 18, 2020\nVIA ELECTRONIC MAIL TO: dwilkins@hilcorp.com\nMr. David S. Wilkins\nSenior Vice President\nHilcorp Alaska, LLC\n3800 Centerpoint Drive, Suite 1400\nAnchorage, Alaska 99503\nCPF Nos. CPF 5-2019-2001; 5-2019-2002W\nDear Mr. Wilkins:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement between\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA) and Hilcorp Alaska, LLC,\nwhich was executed on May 18, 2020. Service of the Consent Order and Consent Agreement by\nelectronic mail is deemed effective upon the date of transmission as provided under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure: Order, Consent Agreement, and Compliance Plan\ncc: Mr. Dustin Hubbard, Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, PHMSA\nMr. David Hassell, Operations Supervisor, Western Region – Alaska, PHMSA\nMs. Denali Kemppel, General Counsel, Hilcorp Alaska, LLC, dkemppel@hilcorp.com\nMr. Justin Furnace, Vice President, Government and Public Affairs, Hilcorp Energy\nCompany, jfurnace@hilcorp.com\nMr. James Curry, Outside Counsel, Babst Calland, jcurry@babstcalland.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\n)\n)\nHilcorp Alaska, LLC, ) CPF Nos. 5-2019-2001;\n) 5-2019-2002W\nRespondent. )\n____________________________________)\nCONSENT ORDER\nBy letter dated January 24, 2019, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety, issued a Notice of Probable Violation (Notice) to Hilcorp\nAlaska, LLC (Hilcorp or Respondent). By letter dated January 25, 2019, PHMSA issued a\nWarning Letter to Respondent.1\nIn accordance with 49 C.F.R. § 190.239, the Notice alleged that Hilcorp reported the Middle\nGround Shoal (MGS) gas pipeline system located in the waters of the Upper Cook Inlet as\nonshore, rather than offshore transmission mileage, in its 2015 Annual Report. The Director\nproposed a civil penalty of $198,700 for this alleged violation and proposed that the Respondent\ntake certain corrective measures to remedy the alleged violation. Also, on January 25, 2019, the\nDirector issued a Warning Letter (Warning) to Hilcorp alleging nine probable violations of the\npipeline safety regulations with regard to the MGS system.\nIn response to the Notice and Warning Letter, Respondent timely requested a hearing and an\ninformal discussion concerning potential settlement of the dispute. The parties subsequently\nengaged in good-faith settlement discussions that have resulted in the Consent Agreement and\nCompliance Plan attached to this Consent Order that settles all of the allegations in the Notice\nand Warning Letter.\nAccordingly, the Consent Agreement and Compliance Plan is hereby approved and incorporated\nby reference into this Consent Order. The Respondent is hereby ordered to comply with the\nterms of the Consent Agreement, effective immediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties of up to $200,000, as adjusted for inflation (see 49 C.F.R.\n§ 190.223), for each violation for each day the violation continues or in referral to the Attorney\nGeneral for appropriate relief in a district court of the United States.\n1 Pursuant to 49 C.F.R. § 190.205, Warning Letters are not adjudicated. However, in this case, resolution of the\nWarning Letter is specifically referenced in the Consent Agreement and is therefore referenced in this Order as well.\n\n\n\nThe terms and conditions of this Consent Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n_____________________________ ________________________\nAlan K. Mayberry Date\nAssociate Administrator\nFor Pipeline Safety\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of )\n) CPF Nos. 5-2019-2001;\nHilcorp Alaska, LLC, ) 5-2019-2002W\nRespondent. )\n)\n)\n)\nSETTLEMENT AGREEMENT\nStarting in 2015, Hilcorp Alaska, LLC (Hilcorp or Respondent) and the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) (collectively, the Parties) began discussing the\njurisdictional status and regulatory classification of Hilcorp’s pipelines in and around the Upper\nCook Inlet. Hilcorp raised this issue with PHMSA and sought clarity on the status of these assets\nafter acquiring them from a number of other operators. Hilcorp maintained that certain assets\nlocated within the waters of the Upper Cook Inlet were exempt from the regulatory requirements\nof 49 C.F.R. Parts 192 and 195. PHMSA informed Hilcorp that it disagreed with that position and\nmaintained that the assets were subject to PHMSA’s regulatory oversight.\nOn October 31, 2018, PHMSA issued a report titled “Inventory of Upper Cook Inlet Pipeline\nFacilities and Identification of Regulators” (Inventory). The Inventory identified federal and state\nagencies with regulatory authority over pipelines located in the waters of the Upper Cook Inlet,\nlisted current pipeline operators and assets in those waters, and made statements regarding\nPHMSA’s views concerning the jurisdictional status of the assets.\nOn January 24, 2019, the Director, Western Region, PHMSA Office of Pipeline Safety, (Director)\nissued a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order\n(Notice) to Hilcorp. The Notice alleged that Hilcorp reported the Middle Ground Shoal (MGS)\ngas pipeline system located in the waters of the Upper Cook Inlet as onshore, rather than offshore\ntransmission mileage, in its 2015 Annual Report. The Director proposed a civil penalty of\n$198,700 for this alleged violation and proposed that the Respondent take certain corrective\nmeasures to remedy the alleged violation. Also, on January 25, 2019, the Director issued a\nWarning Letter (Warning) to Hilcorp alleging nine probable violations of the pipeline safety\nregulations with regard to the MGS system.\nOn January 25, 2019, Hilcorp filed a Petition for Review in the United States Court of Appeals for\nthe D.C. Circuit, No. 19-1016, challenging PHMSA’s statements of jurisdiction and regulatory\noversight in the Inventory (Petition).\nHilcorp timely responded to the Notice and Warning, contested that the pipeline in question was\nproperly classified as “offshore”, and requested a hearing and an informal discussion concerning\nPage 1 of 12\n\n\n\npotential settlement of the dispute. The Parties have reached an agreement that settlement of these\nproceedings will avoid further administrative proceedings or litigation, that entry into this\nSettlement Agreement (Agreement) is the most appropriate means of resolving the issues raised in\nthe Notice, and addressing any findings from PHMSA inspections of the Covered Pipelines\n(defined below) that occurred before the Effective Date of this Agreement, and that the Agreement\nis in the public interest. Therefore, pursuant to 49 C.F.R. Part 190, without adjudication of any\nissue of fact or law, and upon consent and agreement of Hilcorp and PHMSA, the Parties agree as\nfollows:\nI. General Provisions\nAcknowledgements. Hilcorp acknowledges that as of the Effective Date of this\nAgreement Hilcorp, as the operator of certain pipeline facilities that transport hazardous liquids\nand natural gas in the Upper Cook Inlet, is subject to the jurisdiction of the Federal Pipeline Safety\nLaws, 49 U.S.C. § 60101, et seq., and the regulations and administrative orders issued thereunder.\nSpecifically, Respondent acknowledges the following:\na. The Submerged Gathering Pipelines, Out-of-Service Pipelines, and the Kenai\nKatchemak Pipeline as defined in Table 1 of this Agreement, are subject to the\njurisdiction of the Federal Pipeline Safety Laws, 49 U.S.C. § 60101, et seq., and\nthe regulations and administrative orders issued thereunder.\nb. The Onshore Gathering Pipeline as defined in Table 1 of this Agreement as the\nWest Cook Inlet Gas Gathering System, is subject to the jurisdiction of the Federal\nPipeline Safety Laws, 49 U.S.C. § 60101, et seq., and the regulations and\nadministrative orders issued thereunder, but only with regard to the portions of that\npipeline that qualify as a regulated gathering line under PHMSA’s gas gathering\nregulations.\nc. For purposes of this Agreement, Hilcorp acknowledges that it received proper\nnotice of PHMSA’s actions in these proceedings.\nScope of this Agreement. This Agreement applies to Respondents’ Submerged\nGathering Pipelines, Kenai Katchemak Pipeline and the regulated portions of the Onshore\nGathering Pipeline (“Covered Pipelines”) as defined in Table 1 of this Agreement. This\nAgreement also creates separate requirements applicable to the Out-of-Service Pipelines, as\ndefined in Table 1 of this Agreement, which are set out in Section II of the Compliance Plan –\nPlan for Out of Service Pipeline Facilities. This Agreement does not apply to Respondent’s\nunregulated Production Pipelines, the unregulated portions of the Onshore Gathering Pipeline\nas defined in Table 1 of this Agreement, or the unregulated Dolly Varden C pipeline, as the Parties\nagree that these pipelines are not subject to PHMSA’s jurisdiction. The Agreement does not apply\nto any other assets not specifically identified in this Agreement.\nPage 2 of 12\n\n\n\nTable 1\nSubmerged Gathering Pipelines\nPipeline Name\nPipeline Description\nPipeline Regulatory\nClassification\nMonopod A\n8-inch oil pipeline from\nRegulated Offshore\nMonopod Platform to Trading\nGathering\nBay Production Facility\n(TBPF)\nDolly Varden A\n8-inch oil pipeline from Dolly\nRegulated Offshore\nVarden Platform to TBPF\nGathering\nAnna A\n8-inch oil pipeline from Anna Regulated Offshore\nPlatform to Bruce Platform\nGathering\nBruce GP-1\n6-inch oil pipeline from\nRegulated Offshore\nBruce Platform to Granite\nGathering\nPoint Tank Farm (GPTF)\nGranite Point B\n8-inch oil pipeline from\nRegulated Offshore\nGranite Point Platform (GPP)\nto GPTF\nGathering\nSteelhead B\n10-inch gas pipeline from\nRegulated Offshore\nSteelhead Platform to TBPF\nGathering\nMonopod B\n8-inch gas pipeline from\nRegulated Offshore\nTBPF to Monopod Platform\nGathering\nDolly Varden B\n8-inch gas pipeline from\nRegulated Offshore\nTBPF to Dolly Varden\nGathering\nPlatform\nGrayling B\n10-inch gas pipeline from\nRegulated Offshore\nTBPF to Grayling Platform\nGathering\nKing Salmon B\n8-inch gas pipeline from\nRegulated Offshore\nTBPF to King Salmon\nGathering\nPlatform\nAnna B\n8-inch gas pipeline from\nRegulated Offshore\nBruce Platform to Anna\nGathering\nPlatform\nBruce GP-2\n6-inch gas pipeline from\nRegulated Offshore\nGPTF to Bruce Platform\nGathering\nGranite Point A\n8-inch gas pipeline from\nRegulated Offshore\nGPTF to GPP\nGathering\n2 As used in this Agreement, Submerged Gathering Pipelines refers only to the submerged portions of the pipelines\nlisted in Table 1. The Parties recognize that there are relatively short, onshore portions of the Submerged Gathering\nunregulated gas gathering lines under 49 C.F.R. § 192.8. The onshore portions of the liquid Submerged Gathering\nPipelines listed in Table 1. The onshore portions of the gas Submerged Gathering Pipelines are currently Class 1\n§ 195.11.\nPipelines are all rural gathering lines that do not meet the definition of regulated rural gathering line in 49 C.F.R.\nPage 3 of 12\n\n\n\nSpark B\n6-inch gas pipeline from\nRegulated Offshore\nGranite Point Production\nGathering\nFacility (GPPF) to Spark\nPlatform\nSpark Spurr Intertie\n6-inch gas pipeline from\nRegulated Offshore\nSpark Platform to Spurr\nGathering\nPlatform\nOut-of-Service Pipelines\nPipeline Name\nPipeline Description\nPipeline Regulatory\nClassification\nDillon B\n8-inch oil pipeline from\nOut of Service\nPlatform C to Dillon Platform\nDillon D\n8-inch gas pipeline from\nOut of Service\nDillon to East Foreland\nFacility\nBaker A\n8-inch gas pipeline from\nOut of Service\nBaker Platform to Platform\nA.\nSpurr Gas\n6-inch gas pipeline from\nOut of Service\nSpurr Platform to GPPF\nSpurr Oil\n6-inch oil pipeline from Spur Out of Service\nPlatform to GPPF\nSteelhead A\n10-inch gas pipeline from\nOut of Service\nSteelhead Platform to TBPF\nKenai Katchemak Pipeline (KKPL)\nPipeline Name\nPipeline Description\nPipeline Regulatory\nClassification\nKenai Katchemak Pipeline\n12-inch gas pipeline that\nGas transmission\noriginates at the KKPL Tie-ln\nPad and terminates at the\nKenai Gas Field 33-30 Pad.\nOnshore Gathering Pipeline\nPipeline Name\nPipeline Description\nPipeline Regulatory\nClassification\nWest-Cook Inlet Gas\n16-inch gas pipeline from the | Onshore Gathering (Class 1\nGathering System (W-\nTBPF to the terminus at a tie- unregulated)\nCIGGS)\nPage 4 of 12\n\n\n\nin with the Beluga gas\ntransmission pipeline\nProduction Pipelines\nPipeline Name\nPipeline Description\nPipeline Regulatory\nClassification\nGrayling A\n10-inch oil pipeline from\nProduction\nGrayling Platform to TBPF\nKing Salmon A\n8-inch oil pipeline from King\nProduction\nSalmon Platform to TBPF\nSteelhead C\n8-inch oil pipeline from\nProduction\nSteelhead Platform to TBPF\nPlatform A - B1\n8-inch oil pipeline from\nProduction\nPlatform A to East Foreland\nFacility\nPlatform C - B2\n8-inch oil pipeline from\nProduction\nPlatform C to Platform A\nHappy Valley\n6-inch gas pipeline from\nProduction\nHappy Valley Pad B to\nHappy Valley Pad A and then\nto KKPL Tie-In Pad\nPaxton\n8-inch gas pipeline from\nProduction\nPaxton Pad to KKPL\nSusan Dionne\n8-inch gas pipeline from\nProduction\nSusan Dionne to KKPL\nNinilchik State\n8-inch gas pipeline from\nProduction\nNinilchik State Pad to KKPL\nGeorge Oskoloff (GO)\n8-inch gas pipeline from GO\nProduction\nPad to KKPL\nBartolowits\n6-inch gas pipeline from\nProduction\nBartolowits Pad to KKPL\nFalls Creek\n8-inch gas pipeline from Falls\nProduction\nCreek Pad to KKPL\nKasilof Extension\n6-inch gas pipeline from\nProduction\nBartolowits Pad to KKPL\nRespondent agrees to complete the actions specified in Attachment A to this\nAgreement (Compliance Plan) and to abide by the terms of this Agreement. The Compliance\nPlan is incorporated by reference into this Agreement. This Agreement does not constitute a\nfinding of violation of any law or regulation and may not be used in any civil, criminal, or\nadministrative proceeding of any kind as evidence or proof of any fact, fault or liability, or as\nevidence of the violation of any law, rule, regulation or requirement, except in a proceeding to\nenforce the provisions of this Agreement.\nPage 5 of 12\n\n\n\nAfter Respondent returns this signed Agreement to PHMSA, the Agency’s\nrepresentative will present it to the Associate Administrator for Pipeline Safety, recommending\nthat the Associate Administrator adopt the terms of this Agreement by issuing a Consent Order\npursuant 49 C.F.R. § 190.219 incorporating the terms of this Agreement. The terms of this\nAgreement constitute an offer of settlement until accepted by the Associate Administrator. If the\nAssociate Administrator accepts, the Associate Administrator will issue a Consent Order\nincorporating the terms of this Agreement.\nRespondent consents to the issuance of the Consent Order, and hereby waives any\nfurther procedural requirements with respect to its issuance. Respondent waives all rights to\ncontest the adequacy of the Notice, or the validity of the Consent Order or this Agreement,\nincluding all rights to administrative or judicial hearings or appeals, except as set forth herein.\nThis Agreement shall apply to and be binding upon PHMSA, and upon Hilcorp, its\nofficers, directors, and employees, and its successors, assigns, or other entities or persons\notherwise bound by law. Hilcorp agrees to provide a copy of this Agreement and any incorporated\nwork plans and schedules to all of Hilcorp’s officers, employees, and agents whose duties might\nreasonably include compliance with this Agreement.\nFor all transfers of ownership or operating responsibility of the Covered Pipelines,\nHilcorp will provide a copy of this Agreement to the prospective transferee at least 30 days prior\nto such transfer. Hilcorp will provide written notice of a transfer of ownership or operating\nresponsibility to the Director within 30 days after such transfer. This provision shall not apply to\nany of those facilities that have been abandoned in accordance with 49 C.F.R. §§ 192.727 or 195.59\nat or before the time of the transfer.\nThis Agreement constitutes the final, complete, and exclusive agreement and\nunderstanding between the Parties with respect to the settlement embodied in this Agreement. The\nParties acknowledge that there are no representations, agreements or understandings relating to\nsettlement other than those expressly contained in this Agreement.\nNothing in this Agreement affects or relieves Respondent of its responsibility to\ncomply with all applicable requirements of the Federal Pipeline Safety Laws, 49 U.S.C. § 60101,\net seq., and the regulations and orders issued thereunder; and nothing in this Agreement alters\nPHMSA’s right of access, entry, inspection, and information gathering or PHMSA’s authority to\nbring enforcement actions against the Respondent pursuant to the Federal Pipeline Safety Laws,\nthe regulations and orders issued thereunder, or any other provision of Federal or State law; with\nthe following mutual understandings regarding timing:\na. The Parties agree that, to allow Hilcorp time to integrate the Covered Pipelines into\nits PHMSA compliance programs, PHMSA’s inspections of the Covered Pipelines\nduring the pendency of this Agreement will be limited to inspections to verify\ncompliance with this Agreement and to investigate and address existing or\nimminent safety conditions or concerns.\nPage 6 of 12\n\n\n\nb. The Parties agree that nothing in this Agreement prevents PHMSA from\ninvestigating a pipeline accident or incident on any Hilcorp pipeline facilities\nsubject to PHMSA’s jurisdiction, or employing its Corrective Action Order or\nSafety Order authorities under 49 U.S.C. §§ 60112 and 60117(l), respectively.\nc. The Parties agree that, in light of the challenges associated with the jurisdictional\nstatus and regulatory classification of the Covered Pipelines, and the Parties’ long-\nrunning discussions of the same, PHMSA will not bring enforcement actions for\nalleged violations of the Pipeline Safety Laws or PHMSA’s Pipeline Safety\nRegulations that may have occurred with respect to the Covered Pipelines prior to\nthe Effective Date.\nd. The Parties agree that during the pendency of this Agreement, PHMSA will not\nbring enforcement actions against Hilcorp regarding alleged violations of the\nPipeline Safety Laws or PHMSA’s Pipeline Safety Regulations that may occur with\nrespect to the Covered Pipelines, except that PHMSA may bring an enforcement\naction with regard to alleged violations for failing to comply with the terms of this\nAgreement.\ne. Notwithstanding subparagraph (d) of this paragraph, the Parties agree that PHMSA\nmay commence normal inspection and enforcement activities for the activities\ncovered in the Compliance Plan on expiration of the various compliance\ntimeframes as set forth in the Compliance Plan.\nThis Agreement does not waive or modify any Federal, State, or local laws or\nregulations that are applicable to Hilcorp’s pipeline systems. This Agreement is not a permit, or a\nmodification of any permit, under any Federal, State, or local laws or regulations. Respondent\nremains responsible for achieving and maintaining compliance with all applicable Federal, State,\nand local laws, regulations, and permits.\nThis Agreement does not create rights in, or grant any cause of action to, any third\nparty not party to this Agreement. The U.S. Department of Transportation is not liable for any\ninjuries or damages to persons or property arising from acts or omissions of Respondent or its\nofficers, employees, or agents carrying out the work required by this Agreement. Respondent\nagrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,\nand representatives from any and all causes of action arising from any acts or omissions of\nRespondent or its contractors in carrying out any work required by this Agreement.\nShould a change in law, regulation, or operational status of any of the pipelines\nidentified in Table 1 occur that may affect the jurisdictional status or regulatory classifications of\nthe pipeline facilities subject to this Agreement, either Party may notify the other of such potential\nchange, and the Parties agree to discuss any potential classification changes in good faith.\nThe Director may grant an extension of time for compliance with any of the terms\nof this Agreement, including the Compliance Plan, upon a written request timely submitted\ndemonstrating good cause for an extension. Absent unexpected delays, Hilcorp will submit any\nPage 7 of 12\n\n\n\nrequests for extension no less than 30 days before the applicable deadline. The Director shall\nrespond to any such requests within 14 business days of receipt.\nII. Monetary Penalties\nIn consideration of the good faith nature of this Agreement, PHMSA hereby\nwithdraws the allegation and proposed civil penalty of $198,700 in Item 1 of the Notice for CPF\nNo. 5-2019-2001.\nIf Hilcorp commits a Material Breach of this Agreement, as defined in Paragraph\n16, Hilcorp will be liable for stipulated penalties, unless a force majeure event has occurred in\naccordance with Section VI (Force Majeure), according to the following provisions:\na. For each Material Breach of this Agreement, Respondent will pay $750 per day for\neach instance of failure to comply for the first 15 days of noncompliance; $1000\nper day for the 16th through 30th days of noncompliance; and $1,250 per day for\neach day of noncompliance thereafter.\nb. Stipulated penalties under this Paragraph will begin to accrue on the day after\nperformance is due, and shall continue to accrue through the final day of completion\nof the activity.\nc. Respondent will pay any stipulated penalties not more than 30 days after receipt of\nwritten demand by PHMSA for such penalties. Federal regulations (49 C.F.R. §\n89.21(b)(3)) require payments in excess of $10,000 dollars to be made by wire\ntransfer through the Federal Reserve Communications System (Fedwire) to the\naccount of the “U.S. Treasury.”\nA Material Breach of this Agreement shall be the Respondent’s failure to complete\ncertain activities required in the Compliance Plan, as specified below, by the deadline established\nin the Compliance Plan combined with a failure to obtain a time extension for such activity from\nPHMSA. Should Hilcorp appeal a PHMSA decision regarding a time extension pursuant to\nParagraph 23, no Material Breach shall occur until the Associate Administrator issues a\ndetermination with respect to that appeal","truncated":true,"body_characters":50818}