ENI US OPERATING CO, INC — Warning Letter

520195010W_Warning Letter_11122019_text.pdf, page 1Official PDFWARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 12, 2019 Mr. Luca Pellicciotta Vice President, Technical Services Eni US Operating Co., Inc. 1200 Smith Street, Suite 1700 Houston TX 77002 CPF 5-2019-5010W Dear Mr. Pellicciotta: From March 4 through 8, 2019, and on March 19, 2019, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Eni US Operating Co., Inc.’s (Eni) Nikaitchuq Oil Transit Line and Offshore Diesel Fuel Supply Line on the North Slope of Alaska. As a result of the inspection, it is alleged that Eni has committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violations are: 1. § 195.446 Control room management. (a) .… (c) Provide adequate information. Each operator must provide its controllers with the information, tools, processes and procedures necessary for the controllers to carry out the roles and responsibilities the operator has defined by performing each of the following: (3) Test and verify an internal communication plan to provide adequate means for manual operation of the pipeline safely, at least once each calendar year, but at intervals not to exceed 15 months;#

520195010W_Warning Letter_11122019_text.pdf, page 2Eni did not test or verify the documented internal communication plan for manual operation of the pipeline. Eni was unable to provide testing or verification records. 2. § 195.446 Control room management. (a) …. (e) Alarm management. Each operator using a SCADA system must have a written alarm management plan to provide for effective controller response to alarms. An operator's plan must include provisions to: (5) Monitor the content and volume of general activity being directed to and required of each controller at least once each calendar year, but at intervals not exceeding 15 months, that will assure controllers have sufficient time to analyze and react to incoming alarms; Eni did not perform an analysis to determine if controllers performance is currently adequate. Eni was unable to provide records demonstrating annual compliance of an analysis to determine if controllers’ performance was adequate. 3. § 195.446 Control room management. (a) …. (h) Training. Each operator must establish a controller training program and review the training program content to identify potential improvements at least once each calendar year, but at intervals not to exceed 15 months. An operator's program must provide for training each controller to carry out the roles and responsibilities defined by the operator. In addition, the training program must include the following elements: (1) Responding to abnormal operating conditions likely to occur simultaneously or in sequence; (2) Use of a computerized simulator or non-computerized (tabletop) method for training controllers to recognize abnormal operating conditions; (3) Training controllers on their responsibilities for communication under the operator's emergency response procedures; (4) Training that will provide a controller a working knowledge of the pipeline system, especially during the development of abnormal operating conditions; (5) For pipeline operating setups that are periodically, but infrequently used, providing an opportunity for controllers to review relevant procedures in advance of their application; and (6) Control room team training and exercises that include both controllers and other individuals, defined by the operator, who would reasonably be expected to operationally collaborate with controllers (control room personnel) during normal, abnormal or emergency situations. Operators must comply with the team training requirements under this paragraph no later than January 23, 2018. Eni failed to review the controller training program content to identify potential improvements at least once each calendar year, but at intervals not to exceed 15 months. Eni was unable to provide records that demonstrated that the review occurred annually. Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related 2#

520195010W_Warning Letter_11122019_text.pdf, page 3series of violations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum penalty not to exceed $2,090,022. 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. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the items identified in this letter. Failure to do so will result in Eni US Operating Co., Inc. being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 5-2019-5010W. 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). Sincerely, Dustin Hubbard Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 J. Owens (# 164788) Craig Keppers (via electronic mail) Rich Vicente (via electronic mail) Marty Slade (via electronic mail) 3#