Failure Investigation Report - Trans Canada 11162017

Page 1Official PDFDOT U.S. Department of Transportation PHMSA Pipeline and Hazardous Materials Safety Administration OPS Office of Pipeline Safety’s Accident Investigation Division Principal Investigator Brian E. Pierzina AID Director Peter Katchmar Date of Report November 28, 2018 Subject Failure Investigation Report: Material Failure – Mechanical Damage from Original Construction – TC Oil Pipeline Operations, Inc. Operator, Location, & Consequences Date of Failure 11/16/2017 Commodity Released Crude Oil City/County & State Amherst/Marshall – South Dakota OpID & Operator Name 32334 – TC Oil Pipeline Operations, Inc. Unit # & Unit Name 72676 – Keystone Mainline #1 (MP 0.00 to MP 310.70) SMART Activity # 158348 Milepost/Location MP 234.2 – Ludden + 171 Type of Failure Rupture – Material Failure – Damage from Original Construction Fatalities 0 Injuries 0 Description of area impacted Bermed conservation reserve program (CRP) field – Agricultural Area – Non-HCA Total Costs $44,809,560 1 TransCanada commonly refers to locations along the pipeline by referencing a nearby pump station and a distance in miles from that station. Ludden + 17 refers to a location 17 miles downstream from the Ludden pump station in North Dakota.#

Page 2Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Executive Summary On November 16, 2017, at approximately 05:33 Central Standard Time, 2 TC Oil Pipeline Operations, Inc. (TransCanada) 30-inch diameter crude oil pipeline (Keystone) ruptured near Amherst, SD. The rupture resulted in an estimated release of 6592 barrels of crude oil. The estimated spill volume is significantly less than a worst-case discharge scenario due to rapid detection of and control center response to the rupture, coupled with a failure location near the top of the pipe. The failure has been determined by metallurgical evaluation to be the result of mechanical damage that was sustained during original construction of the pipeline. The gouges in the pipeline associated with the failure were found to have elevated levels of chromium, compared to the parent material. The most probable contributor of chromium would be the cleats of tracked heavy equipment that was used extensively throughout the construction process. The specific circumstances resulting in creation of the failure defect were unreported at the time it was sustained. The failure defect was undetected by numerous on-site inspections during construction, post-construction hydrostatic testing, and multiple integrity/quality assurance assessments. It grew incrementally in service (approximately 7.4-years) until failure. In response to the accident, PHMSA issued a Corrective Action Order (CAO) to TransCanada. 3 The CAO contained several requirements associated with investigation, repair, restart, and integrity verification of the pipeline. 2 All times are Central Standard Time unless otherwise noted. 3 PHMSA. (November 28, 2017). CPF #3-2017-5008H. Washington, D.C. Retrieved from: https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/news/56511/320175008h-corrective-action-order- transcanada-11282017.pdf. Page 2 of 14#

Page 3Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 System Details The Keystone Pipeline originates in Hardisty, Alberta, Canada and delivers crude oil to terminals in Patoka, IL and Cushing, OK. The U.S. portion of the pipeline is 1084 miles long, and has 23 pump stations along the route from North Dakota, South Dakota, Nebraska, Kansas, Missouri, Illinois, and Oklahoma. The rupture occurred downstream of the Ludden (ND) pump station, at MP 234.2, in Marshall County, SD. The accident site was in a field, and did not impact a high consequence area (HCA). The section of pipe that failed was constructed in the fall of 2008, as part of construction spread 2A. The failure pipe is 30-inch diameter, 0.386-inch wall thickness, grade X-70 – manufactured by Berg, with a double submerged arc-welded (DSAW) longitudinal weld seam. Concrete set-on weights were installed in the area of the failure to provide negative buoyancy, and maintain the depth of cover.4 The pipeline was constructed, and is operated under a PHMSA Special Permit (SP), 5 which allows operation at up to 80% of specified minimum yield strength (SMYS). The maximum operating pressure (MOP) of the pipeline has been established as 1440 psig. 4 Weights are placed on the top of the pipe in wet areas to keep the pipe from floating. 5 The U.S. Department of Transportation. (November 17, 2006). Special Permit. (Docket Number: PHMSA-2006- 26617). Retrieved from: https://puc.sd.gov/commission/dockets/hydrocarbonpipeline/2007/Hp07- 001/hearingexhibit/tc/tc11.pdf. Page 3 of 14#

Page 4Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 The SP allowed TransCanada to design, construct and operate two new oil pipelines (Keystone Mainline and Keystone Cushing Extension) using a design factor and operating stress level of 80% of the pipe’s SMYS, subject to specified exclusions and 51 specific conditions. Design factors and operating stress levels were otherwise limited to a maximum of 72% of SMYS by regulation. Construction Quality was specifically addressed by SP Condition #21. It required maintenance of a construction quality assurance plan throughout the construction phase of the pipeline. SP Condition #42 addressed Initial In-Line Inspection (ILI), and required a baseline ILI using a high- resolution Magnetic Flux Leakage (MFL) tool to be completed within three years of placing a pipeline segment in service. The SP required the high resolution MFL tool to be capable of gouge detection. It also required the operator to perform a baseline geometry tool run after completion of the hydrostatic strength test and backfill of the pipeline, but no later than six- months after placing the pipeline in service. Additional conditions addressed future ILI inspections, fatigue analysis, crack detection, and reassessment intervals. Page 4 of 14#

Page 5Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Events Leading up to the Failure An ILI consisting of a cleaning tool ahead of a leak detection tool was being conducted in the area of the rupture at the time of the failure. Both the cleaning tool and the leak detection tool had travelled past the nearest block valve downstream of the rupture location (Ludden + 28) prior to the failure. The tools were run in a light-sweet blend (LSB) batch of crude oil, followed by a batch of sour crude. In preparation for the tools to bypass the next downstream pump station (Ferney, SD), a bypass operation of the Ferney pump station had been initiated at 05:03. The bypass of the Ferney pump station was fully executed at 05:24. The Ferney bypass resulted in a gradual and anticipated pressure increase at the Ludden discharge. The pressure records from Ludden indicate the pressure had increased from approximately 1170 psig to 1352 psig, when the rupture occurred. Emergency Response Pressure records show the first indications of the rupture were at 05:33, when a pressure drop was detected at the Main Line Valve (MLV) Ludden + 23.8. This was followed by an abrupt drop in discharge pressure and a corresponding dramatic increase in flow rate at the Ludden pump station. A pressure drop was observed at the Ferney pump station at the same time. The Controller at Keystone’s Operational Control Center (OCC), in Calgary, AB initiated an emergency shutdown of the pipeline at 05:36, and commenced isolation and sectionalization of the pipeline. By 05:45 the failure location had been sectionalized using remotely operated valves. Personnel were dispatched to investigate the pipeline right-of-way for signs of a release, and confirmed oil on the ground at approximately 09:15. Marshall County 911 was contacted, and the Britton Fire Department and Marshall County Sheriff responded within minutes of notification. A safe perimeter of approximately 1 mile in each direction was established, and this security perimeter was maintained throughout the response. TransCanada provided its initial notification of the release to the National Response Center (NRC) at 10:17, almost 5 hours after the rupture occurred.6 PHMSA immediately launched an on-site investigation utilizing personnel from the Accident Investigation Division, Central Region, Emergency Support Division, Community Liaison Group, and Executive Leadership. 6 NRC. (November 16, 2017). Report #1197446. Retrieved from: http://nrc.uscg.mil/FOIAFiles/CY17.xlsx.Page 5 of 14#

Page 6Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 TransCanada response resources including safety, environmental, repair, integrity, and incident command were mobilized immediately. Incident Command and related response operations grew daily, to a maximum of over 200 individuals including company and contract personnel, Overview of the man camp (lower right) and response equipment staging area. and local, state, and federal agencies. An on-site camp capable of housing 90 people was established associated with the incident command location, to reduce the amount of commuting required to and from the failure site. The failure location is in an area of very subtle elevation changes, which necessitated installation of stopple fittings upstream and downstream of the failure, in order to minimize the amount of pipe necessary to be drained to allow for replacement of the failed piping.7 Both stopple fittings were in place, with plugs set, by November 25, 2017. 7 Stopple – The installation of a flow-blocking device in a piping system that cannot otherwise be isolated.Page 6 of 14#

Page 7Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 As of July 24, 2018, TransCanada reported that all released product has been recovered, either as free-product, or within contaminated soil that has been removed from the site. Restoration of the accident site has been completed in accordance with applicable environmental standards. Summary of Return-to-Service A proposed restart plan for the pipeline was developed by TransCanada and approved by the PHMSA Central Region Director. The plan required a daylight restart, and a pressure restriction of 80% of the 60-day high pressure at the location of the failure. The 60-day maximum pressure at the failure location was determined to be 1175 psig. To ensure the pressure at the failure location did not exceed 940 psig, the maximum discharge pressure at the Ludden pump station was reduced to 1046 psig. A temporary MOP reduction from 1440 psig to 1152 psig was established for other locations along the pipeline associated with construction spread 2A, or similar wall thickness and manufacturer at the failure location. Page 7 of 14#

Page 8Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Specific start-up procedures were established for the introduction of product into the pipeline necessary to reconstitute the column and re-pack the pipeline.8 Estimates for the amount of time it would take to see a pressure increase at the downstream pump station were prepared for each section of the pipeline in order to ensure the line was packing as expected. This process took almost two days to complete. Advanced notice of the restart was provided to local emergency officials and landowners. Field personnel were deployed to all above ground facilities to check for leaks and confirm normal operations. Aerial patrols were also conducted over the de-rated section of the pipeline for three days to ensure any abnormalities could be recognized and addressed. The pipeline was restarted on November 29, 2017, at 10:00. Investigation Details Initial observations of the failed pipe in the field were indicative of mechanical damage that had been inflicted to the pipe body. The damage was separate and apart from the longitudinal weld seam. The rupture origin did not involve a girth weld, but the rupture opening did pass through the adjacent girth weld. There was a set-on concrete weight in close proximity to, but not associated with, the rupture opening. The fracture surfaces were protected, and the failed pipe section was removed. The failed piping was prepared for shipment to the NTSB laboratory in Washington, DC. Examination of the failed piping at the NTSB laboratory indicated the rupture was oriented in the axial direction, and extended to a length of 4 feet 4 inches. The rupture opening was just over 11-inches wide at its widest point. The rupture origin was approximately 5.5-inches long, perpendicular to the pipe wall, and exhibited characteristics consistent with fatigue growth. 8 Reconstitute the column – While the pipeline is shutdown, low pressure creates vapor spaces and allows product batches to co-mingle. The pipeline is re-packed to mitigate these conditions.Page 8 of 14#

Page 9Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Girth weld Longitudinal seam Copied from the NTSB Metallurgical report: Figure 13. Overall view of the exterior surface after sectioning with the two sides of the fracture placed in close proximity. Dashed lines indicate the 12 o’clock position, and unlabeled brackets indicate the fatigue crack region. There were indications of mostly axial and parallel gouges similar to sliding contact marks on both sides of the rupture opening. Some of these gouges were up to 30-inches long. Within the rupture origin fatigue region, the near-surface depth associated with the initial damage was 0.098 inches. The fracture surface exhibited eight somewhat distinct crack arrest and re- initiation lines at depths of 0.166-inches, 0.189 inches, 0.222 inches, 0.246-inches, 0.257-inches, 0.267-inches, 0.300-inches, and 0.340-inches. These features typically are associated with large pressure cycles, such as the post-construction hydrostatic test, or operational shutdowns. Page 9 of 14#

Page 10Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Interior FLOW Exterior Copied from the NTSB Metallurgical report: Figure 23. Optical image of the fatigue region at origin area A (see figure 21). Fatigue features emanated from near-surface cracks shown bounded by a yellow dashed line. Unlabeled arrows indicate relatively prominent crack arrest lines where emerging radial marks consistent with crack reinitiation were associated with the arrest line. TransCanada initiated a Root Cause Failure Analysis (RCFA) for this accident, in accordance with the CAO. The RCFA was facilitated by an independent consultant and included a team of subject matter experts (SMEs) from TransCanada. The scope of the RCFA was to assess details associated with design, construction, operations, maintenance, integrity management, leak detection, and metallurgical analysis, and to formulate conclusions and recommendations associated with the findings. This included interviews, review of documents and records, and related analysis, in an attempt to identify potential causal and contributing factors to the failure. The available evidence suggests the mechanical damage to the pipeline occurred during installation, most likely during trenching, lowering-in, installation of the set-on weights, backfilling, or rough cleanup. The bulk of these activities occurred November 7-8, 2008. The Page 10 of 14#

Page 11Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 inspection records associated with these activities indicate the location was wet and muddy, Right-of-way conditions during construction on a similar but different spread. the weather was cold and windy, and working conditions were very difficult. The available inspection records did not document an instance of equipment falling or sliding into the trench. The top of the pipe is approximately 6-feet below ground level. If the damage occurred after the pipe was lowered-in (as suspected), the actual event would have resulted in some relatively intense moments involving equipment operation. The RCFA Team did not interview contractor or inspection personnel who were on site during these activities. 9 The failure to detect, discover, or report the damage during installation and visual inspection of the construction operations was determined to be a causal factor to the accident. 9 The construction occurred in the fall of 2008, nine years prior to the failure. Construction documentation was reviewed in detail, but the RCFA Team considered it too onerous to attempt to find and interview the actual workers involved. Page 11 of 14#

Page 12Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 Right-of-way conditions during construction on a similar but different spread. The post-construction hydrostatic pressure test for the failure segment was completed on June 27, 2009. The test pressure did not fall below 101.7% of SMYS or exceed 107% of SMYS. The pressure test established the MOP for the pipeline as 1440 psig. A construction caliper ILI was performed through the pipeline segment containing the failure location on September 2-3, 2009. The grading specifications for this survey were 1% for dents, and 5% for ovality. There were no actionable anomalies reported associated with the failure location. A different caliper tool was run in 2010, but did not identify any geometry features associated with the rupture location. After the pipeline was placed into service (June 30, 2010), above ground surveys were performed over the pipeline, including a Direct Current Voltage Gradient (DCVG) survey. DCVG surveys are used to identify coating faults on a pipeline by detecting relative changes in the flow of cathodic protection current through measurement of the voltage gradient (IR). In general terms, the larger the gradient, the larger the coating fault would be expected. TransCanada procedures required immediate action for IR indications greater than 35%, monitoring for IR indications between 16% and 35%, and no action for IR indications less thanPage 12 of 14#

Page 13Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 16%. An IR indication of 10% or greater, coincidental with a top-side dent also requires immediate action.10 The DCVG survey resulted in a 2% IR indication directly over the failure location, so it was not acted upon. The RCFA offered some considerations for the relatively minor IR indication compared to the mechanical damage that had been sustained. It is believed that the existence of concrete weights and the increased depth of cover associated with the installation affected the results of the DCVG survey, but the extent of this affect is not quantifiable. TransCanada performed a high resolution magnetic flux leakage (MFL) and caliper ILI in September of 2012. Another ILI was performed using a different tool vendor in May of 2016. Neither of these assessments detected metal loss in excess of 10% within 500 feet of the failure location. Additionally, no geometry features were identified near the failure location by either caliper tool. After the accident, the ILI data was reviewed at a high sensitivity level in an effort to see what, if any, indications could be identified associated with the failure location. No metal loss was detectable, and only a slight deformation was observed associated with the mechanical damage. The limited capability of the tool(s) to detect the gouges that were sustained during original construction was determined to be a causal factor to the accident. TransCanada’s fatigue analysis for the SP estimated that a theoretical flaw 4-inches long and 0.016-inches deep (detection threshold of pipe mill NDE) would not grow to failure within 35 years of operation. This analysis is not applicable to the cold-worked mechanical damage that was sustained at the failure location. 11 The rupture defect failed within 7.4 years of operation. The pressure spectrum the pipeline was subjected to over the history of operation is notable. The pipeline was limited to an MOP of 1296 psig (72% SMYS) from June of 2010 until November of 2014. From November of 2014 until October of 2016 the MOP was limited to 1338 psig (74.2% SMYS). From October of 2016 until the failure occurred, the MOP was 1440 psig (80% SMYS). There were additional threat mitigation activities that have taken place during the operational history of the pipeline which have resulted in a number of relatively high amplitude pressure cycles. High amplitude pressure cycles can contribute significantly to defect growth, and may sometimes be represented by ratchet marks, like those that were evident within the fracture surface. The contribution of operating pressure cycles to the growth and ultimate failure of the rupture defect is a contributing factor to the accident. TransCanada’s OCC identified the failure, and the pipeline controller initiated emergency actions, very quickly. This limited the amount of oil discharged immediately as a result of the rupture to a nearly ideal scenario. The rupture opening was also very near the top of the pipe, significantly limiting the amount of product drained by gravity, compared with a failure on the bottom side of the pipe. The volume of oil spilled as a result of this accident is contributed to 10 Topside Dent – A dent on the top of the pipe is indicative of outside force damage, possibly by a backhoe bucket tooth or other mechanical damage. 11 Cold-worked – metal striking steel at ambient temperature can change the micro-structure and cause the metal to harden and become brittle. Page 13 of 14#

Page 14Failure Investigation Report – TC Oil Pipeline Operations (TransCanada) Rupture – Material Failure – Damage from Original Construction Failure Date 11/16/2017 greatly by the amount estimated to have drained from the pipeline by gravity. The elevation throughout the area of the failure is relatively consistent, so the gravity-drain from the pipeline likely occurred fairly slowly due to minimal head-pressure. The installation of stopple fittings upstream and downstream of the rupture were not completed until November 25th, nine days after the rupture. It is unknown whether, or to what extent, the length of time taken to install the stopple fittings may have contributed to the volume of oil released due to gravity-drain. Findings and Contributing Factors The accident occurred as a result of mechanical damage that was sustained during original construction of the pipeline. The damage was not discovered, detected, or reported at the time it was sustained. The resulting defect survived the post-construction hydrostatic pressure test. The failure defect existed when the pipeline was placed in service, and grew incrementally as a result of operational pressure cycles (fatigue crack growth). The defect was not detected as a result of multiple surveys and ILI assessments that were performed following construction and throughout operation of the pipeline. The rupture defect grew to failure within 7.4 years of operation. It should be assumed that similar damage could be sustained at any time throughout operation of the pipeline, and not be discovered, reported and/or detected at the time it is sustained. There is existing ILI technology capable of detecting these types of defects. Conservative assessment intervals will improve the probability of detection prior to failure. Appendices Appendix A – Map and Photographs Appendix B – NRC Reports Appendix C – Operator’s Written Report Appendix D – NTSB Metallurgical Examination Factual Report Appendix E – Root Cause Failure Analysis Page 14 of 14#

Page 15Appendix A Maps and Photographs#

Page 16FOR OFFICIAL USE ONLY " J Pump Station ! H Accident Location Crude Oil Pipeline High Population Other Population Drinking Water Ecological Appendix A - Map and Photographs 2.25 OPID 32334 TC Oil Pipeline Oper., Inc. - Britton, SD Accident on 16Nov2017 PHMSA CENTRAL REGION µ0 4.5 9 13.5 Miles Dickey Richland Sargent Ludden( MP 216.7) " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J " J Marshall NRC Report # 1197446 Near Britton, SD Keystone 30" Crude Oil Pipeline MP 234.3 IU ID 72676 ! H Brown 375 0 750 1,500 Feet 200 0 400 800 1,200 Feet Roberts ! H Approx. Lat/Lon 45.709444, -97.876944 Initial Release Amounts: 5,000 bbls of Crude Oil Day Source: Google Earth Image Copyright 2018 DigitalGlobe Imagery Date: 11/17/2017 Ferney( MP 263.5) " J Sources: Esri, HERE, Garmin, USGS, Intermap, INCREMENT P, NRCan, Esri Japan, METI, Esri China (Hong Kong), Esri Korea, Esri (Thailand), NGCC, © OpenStreetMap contributors, and the GIS User Community Grant 1#

Page 17Appendix A - Map and Photographs In‐Situ Ruptured Pipe Examination Additional Gouges Adjacent to Rupture Opening 2#

Page 18Appendix A - Map and Photographs NTSB Photo – Rupture Opening – Opposing Fracture Surfaces NTSB Photo – Additional Gouges Adjacent to Rupture Opening 3#

Page 19Appendix A - Map and Photographs NTSB Photos ‐ Rupture Origin – Fracture Surface NTSB Photo – Rupture Origin – Dark Contrast 4#

Page 20Appendix B NRC Reports#

Page 21Appendix B - NRC Reports NATIONAL RESPONSE CENTER 1-800-424-8802 ***GOVERNMENT USE ONLY***GOVERNMENT USE ONLY*** Information released to a third party shall comply with any applicable federal and/or state Freedom of Information and Privacy Laws Incident Report # 1197446 INCIDENT DESCRIPTION *Report taken by: CIV JUSTIN MURRAY at 11:17 on 16-NOV-17 Incident Type: PIPELINE Incident Cause: EQUIPMENT FAILURE Affected Area: Incident occurred on 16-NOV-17 at 09:15 local incident time. Affected Medium: LAND / DIRT, SOIL, VEGETATION REPORTING PARTY Name: ERIK HUGHES Organization: TRANSCANADA Address: 13710 FIRST NATIONAL BANK PKWY OMAHA, NE Email Address: erik_hughes@transcanada.com PRIMARY Phone: (402)4907253 Type of Organization: PRIVATE ENTERPRISE SUSPECTED RESPONSIBLE PARTY Name: ERIK HUGHES Organization: TRANSCANADA 13710 FIRST NATIONAL BANK PKWY OMAHA, NE PRIMARY Phone: (402)4907253 Type of Organization: PRIVATE ENTERPRISE INCIDENT LOCATION SEE LAT AND LONG County: MARSHALL City: BRITTON State: SD Latitude: 45° 42' 28" N Longitude: 097° 52'36" W RELEASED MATERIAL(S) CHRIS Code: OIL Official Material Name: OIL: CRUDE Also Known As: Qty Released: 5000 BARREL(S) DESCRIPTION OF INCIDENT 1#

Page 22Appendix B - NRC Reports CALLER IS REPORTING A DISCHARGE OF CRUDE OIL FROM A TRANSMISSION PIPELINE ONTO THE GROUND. THE DISCHARGE WAS DETECTED VIA SENSORS FROM THE CONTROL CENTER. ________________________________________________________________________ SENSITIVE INFORMATION ________________________________________________________________________ INCIDENT DETAILS Pipeline Type: TRANSMISSION DOT Regulated: YES Pipeline Above/Below Ground: BELOW Exposed or Under Water: NO Pipeline Covered: UNKNOWN ______________________________________________________________________ Fire Involved: NO IMPACT Fire Extinguished: UNKNOWN INJURIES: NO Hospitalized: Empl/Crew: Passenger: FATALITIES: NO Empl/Crew: Passenger: Occupant: EVACUATIONS:NO Who Evacuated: Radius/Area: Damages: NO Hours Direction of Closure Type Description of Closure Closed Closure N Air: N Major Road: Artery:N N Waterway: N Track: Environmental Impact: YES/VEGETATION Media Interest: UNKNOWN Community Impact due to Material: ______________________________________________________________________ REMEDIAL ACTIONS MADE NOTIFICATIONS. CONTRACTORS AND LOCAL RESPONDERS ARE ON SCENE. PIPELINE HAS BEEN SHUT IN. Release Secured: YES Release Rate: 2#

Page 23Appendix B - NRC Reports Estimated Release Duration: ______________________________________________________________________ WEATHER Weather: UNKNOWN, ºF ______________________________________________________________________ ADDITIONAL AGENCIES NOTIFIED Federal: State/Local: State/Local On Scene: State Agency Number: _______________________________________________________________________ NOTIFICATIONS BY NRC CENTERS FOR DISEASE CONTROL (GRASP) 16-NOV-17 11:25 (770)4887100 DHS DEFENSE THREAT REDUCTION AGENCY (CHEMICAL AND BIOLOGICAL TECHNOLOGI 16-NOV-17 11:25 (703)7673477 DHS PROTECTIVE SECURITY ADVISOR (PSA DESK) 16-NOV-17 11:25 (703)2359349 DOT CRISIS MANAGEMENT CENTER (MAIN OFFICE) 16-NOV-17 11:25 (202)3661863 EPA HQ EMERGENCY OPERATIONS CENTER (MAIN OFFICE) 16-NOV-17 11:25 (202)5643850 U.S. EPA VIII (MAIN OFFICE) (303)2931788 U.S. EPA VIII (OIL POLLUTION ACT ENFORCEMENT PRGM) 16-NOV-17 11:25 (303)3126608 IA U.S. ATTORNEY'S OFFICE (INTELLIGENCE OFFICER) 16-NOV-17 11:25 (515)4739345 NE INFORMATION ANALYSIS CENTER (MAIN OFFICE) 16-NOV-17 11:25 NATIONAL INFRASTRUCTURE COORD CTR (MAIN OFFICE) 16-NOV-17 11:25 (202)2829201 NOAA RPTS FOR SD (MAIN OFFICE) 16-NOV-17 11:25 (206)5264911 NRC COMMAND DUTY OFFICER (MAIN OFFICE) (202)2672100 NTSB PIPELINE (MAIN OFFICE) 16-NOV-17 11:25 (202)3146293 PIPELINE & HAZMAT SAFETY ADMIN (OFFICE OF PIPELINE SAFETY (AUTO)) 16-NOV-17 11:25 (202)3660568 PACIFIC STRIKE TEAM (MAIN OFFICE) 16-NOV-17 11:25 (415)8833311 REPORTING PARTY (RP SUBMITTER) 16-NOV-17 11:25 3#

Page 24Appendix B - NRC Reports SOUTH DAKOTA DENR (MAIN OFFICE) 16-NOV-17 11:25 (605)7733296 DOI/OEPC DENVER (MAIN OFFICE) 16-NOV-17 11:25 (303)4452500 USCG DISTRICT 8 (MAIN OFFICE) 16-NOV-17 11:25 (504)5896225 _______________________________________________________________________ ADDITIONAL INFORMATION CALLER WILL BE MAKING ADDITIONAL NOTIFICATIONS. ______________________________________________________________________ *** END INCIDENT REPORT #1197446 *** Report any problems by calling 1-800-424-8802 PLEASE VISIT OUR WEB SITE AT http://www.nrc.uscg.mil The information contained in this communication from the Department of Transportation’s Crisis Management Center (CMC) Watch may be sensitive or privileged and is intended for the sole use of persons or entities named. If you are not an intended recipient of this transmission, you are prohibited from disseminating, distributing, copying or using the information. If you have received this communication in error, please immediately contact the CMC Watch at (202) 366-1863 to arrange for the return of this information. 4#

Page 25Appendix B - NRC Reports NATIONAL RESPONSE CENTER 1-800-424-8802 ***GOVERNMENT USE ONLY***GOVERNMENT USE ONLY*** Information released to a third party shall comply with any applicable federal and/or state Freedom of Information and Privacy Laws Incident Report # 1197610 INCIDENT DESCRIPTION *Report taken by: CIV LEONARD NEWSOM at 12:25 on 18-NOV-17 Incident Type: PIPELINE Incident Cause: UNKNOWN Affected Area: Incident occurred on 16-NOV-17 at 09:15 local incident time. Affected Medium: LAND DIRT, SOIL, VEGETATION REPORTING PARTY ERIK HUGHES Organization: TRANSCANADA Address: 13710 FIRST NATIONAL BANK PKWY OMAHA, NE Email Address: erik_hughes@transcanada.com PRIMARY Phone: (402)4907253 Type of Organization: PRIVATE ENTERPRISE SUSPECTED RESPONSIBLE PARTY Name: ERIK HUGHES Organization: TRANSCANADA Address: 13710 FIRST NATIONAL BANK PKWY OMAHA, NE PRIMARY Phone: (402)4907253 Type of Organization: PRIVATE ENTERPRISE INCIDENT LOCATION County: MARSHALL City: BRITTON State: SD SEE LAT AND LONG RELEASED MATERIAL(S) CHRIS Code: OIL Official Material Name: OIL: CRUDE Also Known As: Qty Released: 5000 BARREL(S) 5#

Page 26Appendix B - NRC Reports DESCRIPTION OF INCIDENT /// UPDATE TO NRC INCIDENT REPORT # 1197446 /// THIS A 48 HOUR UPDATE UNDER PHMSA REGUALTIONS. UPDATE: THERE ARE NO CHANGES, OR UPDATES AT THIS TIME ORIGINAL REPORT: CALLER IS REPORTING A DISCHARGE OF CRUDE OIL FROM A TRANSMISSION PIPELINE ONTO THE GROUND. THE DISCHARGE WAS DETECTED VIA SENSORS FROM THE CONTROL CENTER. /// UPDATE TO NRC INCIDENT REPORT # 1197446 /// ________________________________________________________________________ SENSITIVE INFORMATION ________________________________________________________________________ INCIDENT DETAILS Pipeline Type: TRANSMISSION DOT Regulated: YES Pipeline Above/Below Ground: BELOW Exposed or Under Water: NO Pipeline Covered: UNKNOWN ______________________________________________________________________ Fire Involved: NO IMPACT Fire Extinguished: UNKNOWN INJURIES: NO Hospitalized: Empl/Crew: Passenger: FATALITIES: NO Empl/Crew: Passenger: Occupant: EVACUATIONS:NO Who Evacuated: Radius/Area: Damages: NO Hours Direction of Closure Type Description of Closure Closed Closure N Air: N Major Road: Artery:N N Waterway: N Track: 6#

Page 27Appendix B - NRC Reports Environmental Impact: YES/VEGETATION Media Interest: UNKNOWN Community Impact due to Material: ______________________________________________________________________ REMEDIAL ACTIONS MADE NOTIFICATIONS. CONTRACTORS AND LOCAL RESPONDERS ARE ON SCENE. PIPELINE HAS BEEN SHUT IN. Release Secured: YES Release Rate: Estimated Release Duration: ______________________________________________________________________ WEATHER ______________________________________________________________________ ADDITIONAL AGENCIES NOTIFIED Federal: State/Local: State/Local On Scene: State Agency Number: _______________________________________________________________________ NOTIFICATIONS BY NRC CENTERS FOR DISEASE CONTROL (GRASP) 18-NOV-17 12:37 (770)4887100 DHS DEFENSE THREAT REDUCTION AGENCY (CHEMICAL AND BIOLOGICAL TECHNOLOGI 18-NOV-17 12:37 (703)7673477 DHS PROTECTIVE SECURITY ADVISOR (PSA DESK) 18-NOV-17 12:37 (703)2359349 DOT CRISIS MANAGEMENT CENTER (MAIN OFFICE) 18-NOV-17 12:37 (202)3661863 EPA HQ EMERGENCY OPERATIONS CENTER (MAIN OFFICE) 18-NOV-17 12:37 (202)5643850 U.S. EPA VIII (MAIN OFFICE) (303)2931788 U.S. EPA VIII (OIL POLLUTION ACT ENFORCEMENT PRGM) 18-NOV-17 12:37 (303)3126608 IA U.S. ATTORNEY'S OFFICE (INTELLIGENCE OFFICER) 18-NOV-17 12:37 (515)4739345 NE INFORMATION ANALYSIS CENTER (MAIN OFFICE) 18-NOV-17 12:37 NATIONAL INFRASTRUCTURE COORD CTR (MAIN OFFICE) 18-NOV-17 12:37 (202)2829201 NOAA RPTS FOR SD (MAIN OFFICE) 7#

Page 28Appendix B - NRC Reports 18-NOV-17 12:37 (206)5264911 NTSB PIPELINE (MAIN OFFICE) 18-NOV-17 12:37 (202)3146293 PIPELINE & HAZMAT SAFETY ADMIN (OFFICE OF PIPELINE SAFETY (AUTO)) 18-NOV-17 12:37 (202)3660568 PACIFIC STRIKE TEAM (MAIN OFFICE) 18-NOV-17 12:37 (415)8833311 REPORTING PARTY (RP SUBMITTER) 18-NOV-17 12:37 SOUTH DAKOTA DENR (MAIN OFFICE) 18-NOV-17 12:37 (605)7733296 DOI/OEPC DENVER (MAIN OFFICE) 18-NOV-17 12:37 (303)4452500 USCG DISTRICT 8 (MAIN OFFICE) 18-NOV-17 12:37 (504)5896225 _______________________________________________________________________ ADDITIONAL INFORMATION /// UPDATE TO NRC INCIDENT REPORT # 1197446 /// ______________________________________________________________________ *** END INCIDENT REPORT #1197610 *** Report any problems by calling 1-800-424-8802 PLEASE VISIT OUR WEB SITE AT http://www.nrc.uscg.mil The information contained in this communication from the Department of Transportation’s Crisis Management Center (CMC) Watch may be sensitive or privileged and is intended for the sole use of persons or entities named. If you are not an intended recipient of this transmission, you are prohibited from disseminating, distributing, copying or using the information. If you have received this communication in error, please immediately contact the CMC Watch at (202) 366-1863 to arrange for the return of this information. 8#

Page 29Appendix C Operator's Written Report#

Page 30Appendix C - Operator's Written Report NOTICE: This report is required by 49 CFR Part 195. Failure to report can result in a civil penalty not to exceed $100,000 for each violation for each day that such violation persists except that the maximum civil penalty shall not exceed $1,000,000 as provided in 49 USC 60122. OMB NO: 2137-0047 EXPIRATION DATE: 8/31/2020 Original Report Date: 12/16/2017 U.S Department of Transportation Pipeline and Hazardous Materials Safety Administration No. 20170417 - 31163 -------------------------- (DOT Use Only) ACCIDENT REPORT - HAZARDOUS LIQUID PIPELINE SYSTEMS A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2137-0047. All responses to the collection of information are mandatory. Send comments regarding this burden or any other aspect of this collection of information, including suggestions for reducing the burden to: Information Collection Clearance Officer, PHMSA, Office of Pipeline Safety (PHP-30) 1200 New Jersey Avenue, SE, Washington, D.C. 20590. INSTRUCTIONS Important: Please read the separate instructions for completing this form before you begin. They clarify the information requested and provide specific examples. If you do not have a copy of the instructions, you can obtain one from the PHMSA Pipeline Safety Community Web Page at http://www.phmsa.dot.gov/pipeline/library/forms. PART A - KEY REPORT INFORMATION Report Type: (select all that apply) Original: Supplemental: Yes Final: Yes Last Revision Date: 11/09/2018 1. Operator's OPS-issued Operator Identification Number (OPID): 32334 2. Name of Operator TC OIL PIPELINE OPERATIONS INC 3. Address of Operator: 3a. Street Address Bank of America Center - 700 Louisiana Street 3b. City Houston 3c. State Texas 3d. Zip Code 77002-2700 4. Local time (24-hr clock) and date of the Accident: 11/16/2017 05:33 5. Location of Accident: Latitude: 45.709444 Longitude: -97.876944 6. National Response Center Report Number (if applicable): 1197446 7. Local time (24-hr clock) and date of initial telephonic report to the National Response Center (if applicable): 11/16/2017 10:13 8. Commodity released: (select only one, based on predominant volume released) Crude Oil - Specify Commodity Subtype: - If "Other" Subtype, Describe: - If Biofuel/Alternative Fuel and Commodity Subtype is Ethanol Blend, then % Ethanol Blend: - If Biofuel/Alternative Fuel and Commodity Subtype is Biodiesel, then Biodiesel Blend e.g. B2, B20, B100 9. Estimated volume of commodity released unintentionally (Barrels): 6,592.00 10. Estimated volume of intentional and/or controlled release/blowdown (Barrels): 11. Estimated volume of commodity recovered (Barrels): 6,592.00 12. Were there fatalities? No - If Yes, specify the number in each category: 12a. Operator employees 12b. Contractor employees working for the Operator 12c. Non-Operator emergency responders 12d. Workers working on the right-of-way, but NOT associated with this Operator 12e. General public 12f. Total fatalities (sum of above) 13. Were there injuries requiring inpatient hospitalization? No - If Yes, specify the number in each category: 13a. Operator employees 13b. Contractor employees working for the Operator 13c. Non-Operator emergency responders 13d. Workers working on the right-of-way, but NOT associated with this Operator 13e. General public Form PHMSA F 7000.1 1#

Page 31Appendix C - Operator's Written Report 13f. Total injuries (sum of above) 14. Was the pipeline/facility shut down due to the Accident? Yes - If No, Explain: - If Yes, complete Questions 14a and 14b: (use local time, 24-hr clock) 14a. Local time and date of shutdown: 11/16/2017 05:33 14b. Local time pipeline/facility restarted: 11/29/2017 10:00 - Still shut down? (* Supplemental Report Required) 15. Did the commodity ignite? No 16. Did the commodity explode? No 17. Number of general public evacuated: 0 18. Time sequence (use local time, 24-hour clock): 18a. Local time Operator identified Accident - effective 7- 2014 changed to "Local time Operator identified failure": 11/16/2017 05:36 18b. Local time Operator resources arrived on site: 11/16/2017 09:15 PART B - ADDITIONAL LOCATION INFORMATION 1. Was the origin of the Accident onshore? Yes If Yes, Complete Questions (2-12) If No, Complete Questions (13-15) - If Onshore: 2. State: South Dakota 3. Zip Code: 57421 4. City Not Within a Municipality 5. County or Parish Marshall County 6. Operator-designated location: Milepost/Valve Station Specify: MP 234.3 7. Pipeline/Facility name: Keystone Pipeline 8. Segment name/ID: KS6 9. Was Accident on Federal land, other than the Outer Continental Shelf (OCS)? No 10. Location of Accident: Pipeline Right-of-way 11. Area of Accident (as found): Underground Specify: Under soil - If Other, Describe: Depth-of-Cover (in): 48 12. Did Accident occur in a crossing? No - If Yes, specify type below: - If Bridge crossing – Cased/ Uncased: - If Railroad crossing – Cased/ Uncased/ Bored/drilled - If Road crossing – Cased/ Uncased/ Bored/drilled - If Water crossing – Cased/ Uncased - Name of body of water, if commonly known: - Approx. water depth (ft) at the point of the Accident: - Select: - If Offshore: 13. Approximate water depth (ft) at the point of the Accident: 14. Origin of Accident: - In State waters - Specify: - State: - Area: - Block/Tract #: - Nearest County/Parish: - On the Outer Continental Shelf (OCS) - Specify: - Area: - Block #: 15. Area of Accident: PART C - ADDITIONAL FACILITY INFORMATION 1. Is the pipeline or facility: Interstate 2. Part of system involved in Accident: Onshore Pipeline, Including Valve Sites - If Onshore Breakout Tank or Storage Vessel, Including Attached Appurtenances, specify: 3. Item involved in Accident: Pipe - If Pipe, specify: Pipe Body 3a. Nominal diameter of pipe (in): 30 Form PHMSA F 7000.1 2#

Page 32Appendix C - Operator's Written Report 3b. Wall thickness (in): .386 3c. SMYS (Specified Minimum Yield Strength) of pipe (psi): 70,000 3d. Pipe specification: API 5L 3e. Pipe Seam , specify: DSAW - If Other, Describe: 3f. Pipe manufacturer: Berg 3g. Year of manufacture: 2007 3h. Pipeline coating type at point of Accident, specify: Fusion Bonded Epoxy - If Other, Describe: - If Weld, including heat-affected zone, specify. 3a through 3h above are required: If Pipe Girth Weld, - If Other, Describe: - If Valve, specify: - If Mainline, specify: - If Other, Describe: 3i. Manufactured by: 3j. Year of manufacture: - If Tank/Vessel, specify: - If Other - Describe: - If Other, describe: 4. Year item involved in Accident was installed: 2008 5. Material involved in Accident: Carbon Steel - If Material other than Carbon Steel, specify: 6. Type of Accident Involved: Rupture - If Mechanical Puncture – Specify Approx. size: in. (axial) by in. (circumferential) - If Leak - Select Type: - If Other, Describe: - If Rupture - Select Orientation: Longitudinal - If Other, Describe: Approx. size: in. (widest opening) by 11.3 in. (length circumferentially or axially) 52 - If Other – Describe: PART D - ADDITIONAL CONSEQUENCE INFORMATION 1. Wildlife impact: Yes 1a. If Yes, specify all that apply: - Fish/aquatic - Birds Yes - Terrestrial Yes 2. Soil contamination: Yes 3. Long term impact assessment performed or planned: No 4. Anticipated remediation: Yes 4a. If Yes, specify all that apply: - Surface water - Groundwater - Soil Yes - Vegetation Yes - Wildlife 5. Water contamination: No 5a. If Yes, specify all that apply: - Ocean/Seawater - Surface - Groundwater - Drinking water: (Select one or both) - Private Well - Public Water Intake 5b. Estimated amount released in or reaching water (Barrels): 5c. Name of body of water, if commonly known: 6. At the location of this Accident, had the pipeline segment or facility been identified as one that "could affect" a High Consequence Area (HCA) as determined in the Operator's Integrity Management Program? No 7. Did the released commodity reach or occur in one or more High Consequence Area (HCA)? No 7a. If Yes, specify HCA type(s): (Select all that apply) - Commercially Navigable Waterway: Was this HCA identified in the "could affect" determination for this Accident site in the Operator's Form PHMSA F 7000.1 3#

Page 33Appendix C - Operator's Written Report Integrity Management Program? - High Population Area: Was this HCA identified in the "could affect" determination for this Accident site in the Operator's Integrity Management Program? - Other Populated Area Was this HCA identified in the "could affect" determination for this Accident site in the Operator's Integrity Management Program? - Unusually Sensitive Area (USA) - Drinking Water Was this HCA identified in the "could affect" determination for this Accident site in the Operator's Integrity Management Program? - Unusually Sensitive Area (USA) - Ecological Was this HCA identified in the "could affect" determination for this Accident site in the Operator's Integrity Management Program? 8. Estimated cost to Operator – effective 12-2012, changed to "Estimated Property Damage": 8a. Estimated cost of public and non-Operator private property damage paid/reimbursed by the Operator – effective 12-2012, "paid/reimbursed by the Operator" removed $ 823,400 8b. Estimated cost of commodity lost $ 583,560 8c. Estimated cost of Operator's property damage & repairs $ 5,682,477 8d. Estimated cost of Operator's emergency response $ 6,042,594 8e. Estimated cost of Operator's environmental remediation $ 31,677,529 8f. Estimated other costs $ 0 Describe: All costs are final as of 20180724. 8g. Estimated total costs (sum of above) – effective 12-2012, changed to "Total estimated property damage (sum of above)" $ 44,809,560 PART E - ADDITIONAL OPERATING INFORMATION 1. Estimated pressure at the point and time of the Accident (psig): 1,067.00 2. Maximum Operating Pressure (MOP) at the point and time of the Accident (psig): 1,440.00 3. Describe the pressure on the system or facility relating to the Accident (psig): Pressure did not exceed MOP 4. Not including pressure reductions required by PHMSA regulations (such as for repairs and pipe movement), was the system or facility relating to the Accident operating under an established pressure restriction with pressure limits below those normally allowed by the MOP? No - If Yes, Complete 4.a and 4.b below: 4a. restriction? Did the pressure exceed this established pressure 4b. State? Was this pressure restriction mandated by PHMSA or the 5. 2? Was "Onshore Pipeline, Including Valve Sites" OR "Offshore Pipeline, Including Riser and Riser Bend" selected in PART C, Question Yes - If Yes - (Complete 5a. – 5f below) effective 12-2012, changed to "(Complete 5.a – 5.e below)" 5a. Type of upstream valve used to initially isolate release source: Remotely Controlled 5b. Type of downstream valve used to initially isolate release source: Remotely Controlled 5c. Length of segment isolated between valves (ft): 125,664 5d. Is the pipeline configured to accommodate internal inspection tools? Yes - If No, Which physical features limit tool accommodation? (select all that apply) - Changes in line pipe diameter - Presence of unsuitable mainline valves - Tight or mitered pipe bends - Other passage restrictions (i.e. unbarred tee's, projecting instrumentation, etc.) - Extra thick pipe wall (applicable only for magnetic flux leakage internal inspection tools) - Other - - If Other, Describe: 5e. For this pipeline, are there operational factors which significantly complicate the execution of an internal inspection tool run? No - If Yes, Which operational factors complicate execution? (select all that apply) Form PHMSA F 7000.1 4#

Page 34Appendix C - Operator's Written Report - Excessive debris or scale, wax, or other wall buildup - Low operating pressure(s) - Low flow or absence of flow - Incompatible commodity - Other - - If Other, Describe: 5f. Function of pipeline system: > 20% SMYS Regulated Trunkline/Transmission 6. Was a Supervisory Control and Data Acquisition (SCADA)-based system in place on the pipeline or facility involved in the Accident? Yes If Yes - 6a. Was it operating at the time of the Accident? Yes 6b. Was it fully functional at the time of the Accident? Yes 6c. Did SCADA-based information (such as alarm(s), alert(s), event(s), and/or volume calculations) assist with the detection of the Accident? Yes 6d. Did SCADA-based information (such as alarm(s), alert(s), event(s), and/or volume calculations) assist with the confirmation of the Accident? Yes 7. Was a CPM leak detection system in place on the pipeline or facility involved in the Accident? Yes - If Yes: 7a. Was it operating at the time of the Accident? Yes 7b. Was it fully functional at the time of the Accident? Yes 7c. Did CPM leak detection system information (such as alarm(s), alert(s), event(s), and/or volume calculations) assist with the detection of the Accident? Yes 7d. Did CPM leak detection system information (such as alarm(s), alert(s), event(s), and/or volume calculations) assist with the confirmation of the Accident? Yes 8. How was the Accident initially identified for the Operator? CPM leak detection system or SCADA-based information (such as alarm(s), alert(s), event(s), and/or volume calculations) - If Other, Specify: 8a. If "Controller", "Local Operating Personnel", including contractors", "Air Patrol", or "Ground Patrol by Operator or its contractor" is selected in Question 8, specify: 9. Was an investigation initiated into whether or not the controller(s) or control room issues were the cause of or a contributing factor to the Accident? Yes, specify investigation result(s): (select all that apply) - If No, the Operator did not find that an investigation of the controller(s) actions or control room issues was necessary due to: (provide an explanation for why the operator did not investigate) - If Yes, specify investigation result(s): (select all that apply) - Investigation reviewed work schedule rotations, continuous hours of service (while working for the Operator), and other factors associated with fatigue Yes - Investigation did NOT review work schedule rotations, continuous hours of service (while working for the Operator), and other factors associated with fatigue Provide an explanation for why not: - Investigation identified no control room issues Yes - Investigation identified no controller issues Yes - Investigation identified incorrect controller action or controller error - Investigation identified that fatigue may have affected the controller(s) involved or impacted the involved controller(s) response - Investigation identified incorrect procedures - Investigation identified incorrect control room equipment operation - Investigation identified maintenance activities that affected control room operations, procedures, and/or controller response - Investigation identified areas other than those above: Describe: PART F - DRUG & ALCOHOL TESTING INFORMATION Form PHMSA F 7000.1 5#

Page 35Appendix C - Operator's Written Report 1. As a result of this Accident, were any Operator employees tested under the post-accident drug and alcohol testing requirements of DOT's Drug & Alcohol Testing regulations? No - If Yes: 1a. Specify how many were tested: 1b. Specify how many failed: 2. As a result of this Accident, were any Operator contractor employees tested under the post-accident drug and alcohol testing requirements of DOT's Drug & Alcohol Testing regulations? No - If Yes: 2a. Specify how many were tested: 2b. Specify how many failed: PART G – APPARENT CAUSE Select only one box from PART G in shaded column on left representing the APPARENT Cause of the Accident, and answer the questions on the right. Describe secondary, contributing or root causes of the Accident in the narrative (PART H). Apparent Cause: G5 - Material Failure of Pipe or Weld G1 - Corrosion Failure - only one sub-cause can be picked from shaded left-hand column Corrosion Failure – Sub-Cause: - If External Corrosion: 1. Results of visual examination: - If Other, Describe: 2. Type of corrosion: (select all that apply) - Galvanic - Atmospheric - Stray Current - Microbiological - Selective Seam - Other: - If Other, Describe: 3. The type(s) of corrosion selected in Question 2 is based on the following: (select all that apply) - Field examination - Determined by metallurgical analysis - Other: - If Other, Describe: 4. Was the failed item buried under the ground? - If Yes : 4a. Was failed item considered to be under cathodic protection at the time of the Accident? If Yes - Year protection started: 4b. Was shielding, tenting, or disbonding of coating evident at the point of the Accident? 4c. Has one or more Cathodic Protection Survey been conducted at the point of the Accident? If "Yes, CP Annual Survey" – Most recent year conducted: If "Yes, Close Interval Survey" – Most recent year conducted: If "Yes, Other CP Survey" – Most recent year conducted: - If No: 4d. Was the failed item externally coated or painted? 5. Was there observable damage to the coating or paint in the vicinity of the corrosion? - If Internal Corrosion: 6. Results of visual examination: - Other: 7. Type of corrosion (select all that apply): - - Corrosive Commodity - Water drop-out/Acid - Microbiological - Erosion - Other: - If Other, Describe: 8. The cause(s) of corrosion selected in Question 7 is based on the following (select all that apply): - - Field examination - Determined by metallurgical analysis - Other: Form PHMSA F 7000.1 6#

Page 36Appendix C - Operator's Written Report - If Other, Describe: 9. Location of corrosion (select all that apply): - - Low point in pipe - Elbow - Other: - If Other, Describe: 10. Was the commodity treated with corrosion inhibitors or biocides? 11. Was the interior coated or lined with protective coating? 12. Were cleaning/dewatering pigs (or other operations) routinely utilized? 13. Were corrosion coupons routinely utilized? Complete the following if any Corrosion Failure sub-cause is selected AND the "Item Involved in Accident" (from PART C, Question 3) is Tank/Vessel. 14. List the year of the most recent inspections: 14a. API Std 653 Out-of-Service Inspection - No Out-of-Service Inspection completed 14b. API Std 653 In-Service Inspection - No In-Service Inspection completed Complete the following if any Corrosion Failure sub-cause is selected AND the "Item Involved in Accident" (from PART C, Question 3) is Pipe or Weld. 15. Accident? Has one or more internal inspection tool collected data at the point of the 15a. If Yes, for each tool used, select type of internal inspection tool and indicate most recent year run: - - Magnetic Flux Leakage Tool Most recent year: - Ultrasonic Most recent year: - Geometry Most recent year: - Caliper Most recent year: - Crack Most recent year: - Hard Spot Most recent year: - Combination Tool Most recent year: - Transverse Field/Triaxial Most recent year: - Other Most recent year: Describe: 16. Has one or more hydrotest or other pressure test been conducted since original construction at the point of the Accident? If Yes - Most recent year tested: Test pressure: 17. Has one or more Direct Assessment been conducted on this segment? - If Yes, and an investigative dig was conducted at the point of the Accident:: Most recent year conducted: - If Yes, but the point of the Accident was not identified as a dig site: Most recent year conducted: 18. Has one or more non-destructive examination been conducted at the point of the Accident since January 1, 2002? 18a. If Yes, for each examination conducted since January 1, 2002, select type of non-destructive examination and indicate most recent year the examination was conducted: - Radiography Most recent year conducted: - Guided Wave Ultrasonic Most recent year conducted: - Handheld Ultrasonic Tool Most recent year conducted: - Wet Magnetic Particle Test Most recent year conducted: - Dry Magnetic Particle Test Most recent year conducted: - Other Most recent year conducted: Describe: Form PHMSA F 7000.1 7#

Page 37Appendix C - Operator's Written Report G2 - Natural Force Damage - only one sub-cause can be picked from shaded left-handed column Natural Force Damage – Sub-Cause: - If Earth Movement, NOT due to Heavy Rains/Floods: 1. Specify: - If Other, Describe: - If Heavy Rains/Floods: 2. Specify: - If Other, Describe: - If Lightning: 3. Specify: - If Temperature: 4. Specify: - If Other, Describe: - If Other Natural Force Damage: 5. Describe: Complete the following if any Natural Force Damage sub-cause is selected. 6. Were the natural forces causing the Accident generated in conjunction with an extreme weather event? 6a. If Yes, specify: (select all that apply) - Hurricane - Tropical Storm - Tornado - Other - If Other, Describe: G3 - Excavation Damage - only one sub-cause can be picked from shaded left-hand column Excavation Damage – Sub-Cause: - If Previous Damage due to Excavation Activity: Complete Questions 1-5 ONLY IF the "Item Involved in Accident" (from PART C, Question 3) is Pipe or Weld. 1. Has one or more internal inspection tool collected data at the point of the Accident? 1a. If Yes, for each tool used, select type of internal inspection tool and indicate most recent year run: - - Magnetic Flux Leakage Most recent year conducted: - Ultrasonic Most recent year conducted: - Geometry Most recent year conducted: - Caliper Most recent year conducted: - Crack Most recent year conducted: - Hard Spot Most recent year conducted: - Combination Tool Most recent year conducted: - Transverse Field/Triaxial Most recent year conducted: - Other Most recent year conducted: Describe: 2. Do you have reason to believe that the internal inspection was completed BEFORE the damage was sustained? 3. Has one or more hydrotest or other pressure test been conducted since original construction at the point of the Accident? - If Yes: Most recent year tested: Test pressure (psig): 4. Has one or more Direct Assessment been conducted on the pipeline segment? - If Yes, and an investigative dig was conducted at the point of the Accident: Most recent year conducted: - If Yes, but the point of the Accident was not identified as a dig site: Most recent year conducted: 5. Has one or more non-destructive examination been conducted at the point of the Accident since January 1, 2002? Form PHMSA F 7000.1 8#

Page 38Appendix C - Operator's Written Report 5a. If Yes, for each examination, conducted since January 1, 2002, select type of non-destructive examination and indicate most recent year the examination was conducted: - Radiography Most recent year conducted: - Guided Wave Ultrasonic Most recent year conducted: - Handheld Ultrasonic Tool Most recent year conducted: - Wet Magnetic Particle Test Most recent year conducted: - Dry Magnetic Particle Test Most recent year conducted: - Other Most recent year conducted: Describe: Complete the following if Excavation Damage by Third Party is selected as the sub-cause. 6. Did the operator get prior notification of the excavation activity? 6a. If Yes, Notification received from: (select all that apply) - - One-Call System - Excavator - Contractor - Landowner Complete the following mandatory CGA-DIRT Program questions if any Excavation Damage sub-cause is selected. 7. Do you want PHMSA to upload the following information to CGA- DIRT (www.cga-dirt.com)? 8. Right-of-Way where event occurred: (select all that apply) - - Public - If "Public", Specify: - Private - If "Private", Specify: - Pipeline Property/Easement - Power/Transmission Line - Railroad - Dedicated Public Utility Easement - Federal Land - Data not collected - Unknown/Other 9. Type of excavator: 10. Type of excavation equipment: 11. Type of work performed: 12. Was the One-Call Center notified? 12a. If Yes, specify ticket number: 12b. If this is a State where more than a single One-Call Center exists, list the name of the One-Call Center notified: 13. Type of Locator: 14. Were facility locate marks visible in the area of excavation? 15. Were facilities marked correctly? 16. Did the damage cause an interruption in service? 16a. If Yes, specify duration of the interruption (hours) 17. Description of the CGA-DIRT Root Cause (select only the one predominant first level CGA-DIRT Root Cause and then, where available as a choice, the one predominant second level CGA-DIRT Root Cause as well): Root Cause: - If One-Call Notification Practices Not Sufficient, specify: - If Locating Practices Not Sufficient, specify: - If Excavation Practices Not Sufficient, specify: - If Other/None of the Above, explain: G4 - Other Outside Force Damage - only one sub-cause can be selected from the shaded left-hand column Other Outside Force Damage – Sub-Cause: - If Damage by Car, Truck, or Other Motorized Vehicle/Equipment NOT Engaged in Excavation: 1. Vehicle/Equipment operated by: - If Damage by Boats, Barges, Drilling Rigs, or Other Maritime Equipment or Vessels Set Adrift or Which Have Otherwise Lost Their Mooring: 2. Select one or more of the following IF an extreme weather event was a factor: - Hurricane - Tropical Storm - Tornado Form PHMSA F 7000.1 9#

Page 39Appendix C - Operator's Written Report - Heavy Rains/Flood - Other - If Other, Describe: - If Previous Mechanical Damage NOT Related to Excavation: Complete Questions 3-7 ONLY IF the "Item Involved in Accident" (from PART C, Question 3) is Pipe or Weld. 3. Has one or more internal inspection tool collected data at the point of the Accident? 3a. If Yes, for each tool used, select type of internal inspection tool and indicate most recent year run: - Magnetic Flux Leakage Most recent year conducted: - Ultrasonic Most recent year conducted: - Geometry Most recent year conducted: - Caliper Most recent year conducted: - Crack Most recent year conducted: - Hard Spot Most recent year conducted: - Combination Tool Most recent year conducted: - Transverse Field/Triaxial Most recent year conducted: - Other Most recent year conducted: Describe: 4. Do you have reason to believe that the internal inspection was completed BEFORE the damage was sustained? 5. Has one or more hydrotest or other pressure test been conducted since original construction at the point of the Accident? - If Yes: Most recent year tested: Test pressure (psig): 6. Has one or more Direct Assessment been conducted on the pipeline segment? - If Yes, and an investigative dig was conducted at the point of the Accident: Most recent year conducted: - If Yes, but the point of the Accident was not identified as a dig site: Most recent year conducted: 7. Has one or more non-destructive examination been conducted at the point of the Accident since January 1, 2002? 7a. If Yes, for each examination conducted since January 1, 2002, select type of non-destructive examination and indicate most recent year the examination was conducted: - Radiography Most recent year conducted: - Guided Wave Ultrasonic Most recent year conducted: - Handheld Ultrasonic Tool Most recent year conducted: - Wet Magnetic Particle Test Most recent year conducted: - Dry Magnetic Particle Test Most recent year conducted: - Other Most recent year conducted: Describe: - If Intentional Damage: 8. Specify: - If Other, Describe: - If Other Outside Force Damage: 9. Describe: G5 - Material Failure of Pipe or Weld - only one sub-cause can be selected from the shaded left-hand column Use this section to report material failures ONLY IF the "Item Involved in Accident" (from PART C, Question 3) is "Pipe" or "Weld." Material Failure of Pipe or Weld – Sub-Cause: Construction-, Installation-, or Fabrication-related 1. The sub-cause shown above is based on the following: (select all that apply) Form PHMSA F 7000.1 10#

Page 40Appendix C - Operator's Written Report - Field Examination - Determined by Metallurgical Analysis Yes - Other Analysis - If "Other Analysis", Describe: - Sub-cause is Tentative or Suspected; Still Under Investigation (Supplemental Report required) - If Construction, Installation, or Fabrication-related: 2. List contributing factors: (select all that apply) - Fatigue or Vibration-related Yes Specify: Pressure-related - If Other, Describe: - Mechanical Stress: - Other - If Other, Describe: - If Environmental Cracking-related: 3. Specify: - If Other - Describe: Complete the following if any Material Failure of Pipe or Weld sub-cause is selected. 4. Additional factors: (select all that apply): - Dent - Gouge Yes - Pipe Bend - Arc Burn - Crack Yes - Lack of Fusion - Lamination - Buckle - Wrinkle - Misalignment - Burnt Steel - Other: - If Other, Describe: 5. Has one or more internal inspection tool collected data at the point of the Accident? Yes 5a. If Yes, for each tool used, select type of internal inspection tool and indicate most recent year run: - Magnetic Flux Leakage Yes Most recent year run: 2016 - Ultrasonic Most recent year run: - Geometry Yes Most recent year run: 2016 - Caliper Yes Most recent year run: 2016 - Crack Most recent year run: - Hard Spot Most recent year run: - Combination Tool Most recent year run: - Transverse Field/Triaxial Most recent year run: - Other Yes Most recent year run: 2017 Describe: Acoustic Leak Detection 6. Has one or more hydrotest or other pressure test been conducted since original construction at the point of the Accident? No - If Yes: Most recent year tested: Test pressure (psig): 7. Has one or more Direct Assessment been conducted on the pipeline segment? No - If Yes, and an investigative dig was conducted at the point of the Accident - Most recent year conducted: - If Yes, but the point of the Accident was not identified as a dig site - Most recent year conducted: 8. Has one or more non-destructive examination(s) been conducted at the point of the Accident since January 1, 2002? No 8a. If Yes, for each examination conducted since January 1, 2002, select type of non-destructive examination and indicate most recent year the examination was conducted: - Form PHMSA F 7000.1 11#

Page 41Appendix C - Operator's Written Report - Radiography Most recent year conducted: - Guided Wave Ultrasonic Most recent year conducted: - Handheld Ultrasonic Tool Most recent year conducted: - Wet Magnetic Particle Test Most recent year conducted: - Dry Magnetic Particle Test Most recent year conducted: - Other Most recent year conducted: Describe: G6 – Equipment Failure - only one sub-cause can be selected from the shaded left-hand column Equipment Failure – Sub-Cause: - If Malfunction of Control/Relief Equipment: 1. Specify: (select all that apply) - - Control Valve - Instrumentation - SCADA - Communications - Block Valve - Check Valve - Relief Valve - Power Failure - Stopple/Control Fitting - ESD System Failure - Other - If Other – Describe: - If Pump or Pump-related Equipment: 2. Specify: - If Other – Describe: - If Threaded Connection/Coupling Failure: 3. Specify: - If Other – Describe: - If Non-threaded Connection Failure: 4. Specify: - If Other – Describe: - If Other Equipment Failure: 5. Describe: Complete the following if any Equipment Failure sub-cause is selected. 6. Additional factors that contributed to the equipment failure: (select all that apply) - Excessive vibration - Overpressurization - No support or loss of support - Manufacturing defect - Loss of electricity - Improper installation - Mismatched items (different manufacturer for tubing and tubing fittings) - Dissimilar metals - Breakdown of soft goods due to compatibility issues with transported commodity - Valve vault or valve can contributed to the release - Alarm/status failure - Misalignment - Thermal stress - Other - If Other, Describe: G7 - Incorrect Operation - only one sub-cause can be selected from the shaded left-hand column Incorrect Operation – Sub-Cause: Form PHMSA F 7000.1 12#

Page 42Appendix C - Operator's Written Report - If Tank, Vessel, or Sump/Separator Allowed or Caused to Overfill or Overflow 1. Specify: - If Other, Describe: - If Other Incorrect Operation 2. Describe: Complete the following if any Incorrect Operation sub-cause is selected. 3. Was this Accident related to (select all that apply): - - Inadequate procedure - No procedure established - Failure to follow procedure - Other: - If Other, Describe: 4. What category type was the activity that caused the Accident? 5. Was the task(s) that led to the Accident identified as a covered task in your Operator Qualification Program? 5a. If Yes, were the individuals performing the task(s) qualified for the task(s)? G8 - Other Accident Cause - only one sub-cause can be selected from the shaded left-hand column Other Accident Cause – Sub-Cause: - If Miscellaneous: 1. Describe: - If Unknown: 2. Specify: PART H - NARRATIVE DESCRIPTION OF THE ACCIDENT On 16 Nov, 2017, at 05:34 CST, a pressure drop was experienced on Keystone approximately 17.4 miles downstream of Ludden Pump Station, resulting in the pipeline being shut down. At 09:15, technicians confirmed oil on the ground. At 10:13 CST, the NRC was called, and a report generated (1197446) and distributed at 10:26. Contact with PHMSA Accident Investigation Division made at 1025; PHMSA on site from 17 to 28 Nov. Pipeline was subsequently restarted on 29 Nov after replacement of failed section. Metallurgical testing being performed by the National Transportation Safety Board; results pending. Regarding Part D, 1a., there one bird and one raccoon were lost. 20180315 Supplemental Report: Updated commodity released and recovered, costs associated with the accident, and cause of the failure (second party damage) as derived from the National Transportation Safety Board (NTSB) draft metallurgic report, and confirmed by a mutually agreed upon third party contractor, Keifner and Associates. 20180810 Supplemental Report: Final costs received and vetted through leadership on 20180724, with approval on 20180801. 20180822 - Updated Part G Apparent Cause to a G5 from a G8, and Part E for controller investigation. 20181109 - Updated Part A volume released to 6,592 bbls; volume derived through Pipe Integrity calculation based on exact location, depth of cover, actual shutdown times, and position of the rupture. PART I - PREPARER AND AUTHORIZED SIGNATURE Preparer's Name Erik Hughes Preparer's Title US Regulatory Compliance Manager Preparer's Telephone Number 4024907253 Preparer's E-mail Address erik_hughes@transcanada.com Preparer's Facsimile Number Authorized Signer Name Sonya Kirby Authorized Signer Title Vice President - Safety Quality and Compliance Authorized Signer Telephone Number 4039207255 Authorized Signer Email sonya_kirby@transcanada.com Date 11/09/2018 Form PHMSA F 7000.1 13#