Failure Report- Explorer Pipeline Co 8/17/09

Page 1Official PDFMemorandum U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Date: November 2, 2010 To: R. M. Seeley, Regional Director, Southwest Region From: Gene Roberson, General Engineer Subject: Incident Report: Explorer Pipeline OPID: 4805 Unit No.: 2494 Date of incident: August 17, 2009 Atoka County, OK. NRC Report # 915209 ODES Report # 20090261 Summary: At approximately 5:45 pm CST, August 17, 2009, Explorer Pipeline Company (Explorer) identified a product release on their Greenville, TX – Glenpool, OK 28-inch OD pipeline in Atoka County, OK. Explorer’s aerial patrol observed an area of dead vegetation at Mile Post (MP) 398.7 on the ROW, and ground crews confirmed the indication of a release from the odor of petroleum products in the area. The pipeline was shut in immediately, and crews mobilized to excavate the pipeline for confirmation of the release and repair of the pipeline. The section of the pipeline where the release occurred has an MOP of 751 psig and was operating at 129 psig when the release was confirmed. Records indicate the highest operating pressure for the previous 30 days was 682 psig. Upon excavation a 2% dent with metal loss was found on the bottom of the pipe (6 o’clock position) with product being released. Explorer made a temporary repair of the location by installing a PLIDCO Repair Sleeve over the area until a permanent repair could be made. The pipeline was returned to service at a reduced pressure, pending scheduling of a shutdown to allow a permanent repair to be completed. Fifty (50) barrels (bbls) of diesel fuel were estimated to have been released as a result of this accident, and none was recovered. -1-#

Page 2During the week of October 26, 2009 the pipeline was shut in, and a permanent repair was made by installing a section of new pipe in the area of the release. A 10-foot section of pipe containing the failure was then transported to the DNV Columbus Inc. laboratory facility in Dublin, Ohio, for a metallurgical failure investigation. The pipe section in which the release occurred is 28-inch OD, 0.281-inch nominal wall thickness (wt), API 5L X52 line pipe with double submerged arc welded (DSAW) longitudinal seams. The pipe was manufactured in 1971 by STELCO Corporation. The metallurgical analysis determined the probable cause of the release to be through wall cracking consistent with near-neutral pH stress corrosion cracking (SCC). At the time of the release, Explorer was in the process of re-evaluating previous in-line inspection tool (ILI) log run data from 2007 and 2008 ILI runs and performing 58 additional verification digs associated with this segment of pipeline, and no SCC was identified in these excavations. Specifically, there were 4 additional locations that had ILI data characteristics similar to the anomaly at the release location, and these 4 “dent- like” locations were excavated and examined. None of the 4 additional excavation sites contained SCC. As a result of the accident, Explorer hired vendors to support additional data analysis, excavations, and inspections. In all previous excavations on this pipeline segment, SCC has only been identified in the presence of deformation anomalies (dents); therefore, post accident activities were tailored to address SCC within dents. Explorer’s program for identifying sites of possible SCC in dents had focused on dents > 2% OD in depth, but the dent at the failure site was less than 2%. Therefore, ILI tool data was analyzed for all areas where dents were present in areas of metal loss. The analysis identified 328 locations for evaluation, and 15 sites were identified for further examination. The excavations performed did not reveal any additional locations with SCC present. Background: The PHMSA inspection unit in which the release occurred (SMART # 2494) has a history of failures due to SCC in 2004 and in 2007 resulting in a Corrective Action Order (CAO) being issued to Explorer (CPF 4-2007-5021H). CPF 4-2007-5021H was closed on 09/01/2009. System description: Explorer Pipeline Company owns and operates a 1400-mile pipeline system transporting primarily gasoline, fuel oil and jet fuel from Gulf Coast refineries and import facilities in Texas and Louisiana into the Midwestern United States. The system was constructed in 1971. The main line pipe size is 28-inch OD from Port Arthur, Texas, to Glenpool, Oklahoma (southern line segment) and 24-inch OD from Glenpool to Hammond, Indiana (northern line segment). There are 20 pump stations located throughout the system, which has a current total line capacity of 560,000 barrels per day on the southern segment and 350,000 barrels per day on the northern segment. Explorer's pipeline operations are monitored and controlled from the Explorer Control Center located in the Tulsa Headquarters office. -2-#

Page 3The release occurred in PHMSA Inspection Unit 2494 – Central District. The pipeline unit travels from Greenville, TX to Glenpool, OK, to the OK-MO State line near Joplin, MO and consists of 31 tanks and 432 miles of pipeline. The main line was installed in 1971 consisting of 28-inch OD, 0.280/0.312-inch wt, API 5L X-52, DSAW longitudinal seam line pipe from STELCO. The line has coal tar enamel external coating. Findings: The line pipe in which the release occurred was evaluated during the installation of the PLIDCO sleeve. Evidence of a dent with metal loss was present but no further details were obtainable at that time. On October 26, 2009 the section of pipe containing the probable leak was removed from the Explorer system and transported to DNV Columbus for metallurgical analysis. The metallurgical analysis determined the probable cause of the release to be through wall cracking consistent with near-neutral pH SCC. Conclusions: Stress corrosion cracking in the Greenville to Glenpool segment of pipeline has only been found to date in conjunction with external dents/deformation of the pipe. Appendices: • Appendix A – NRC # 915209 • Appendix B – PHMSA F 7000.1 - ODES #20090261 • Appendix C – DNV Metallurgical Report ENAUS813BPADG Privileged and Confidential • Appendix D – DNV Incident Summary ANEUS822TARP Privileged and Confidential -3-#

Page 4Appendix A NRC Report 915209#

Page 5Page 1 of 2 NATIONAL RESPONSE CENTER 1-800-424-8802 *** For Public Use *** Information released to a third party shall comply with any applicable federal and/or state Freedom of Information and Privacy Laws Incident Report # 915209 INCIDENT DESCRIPTION *Report taken at 18:58 on 17-AUG-09 Incident Type: PIPELINE Incident Cause: UNKNOWN Affected Area: The incident was discovered on 17-AUG-09 at 17:45 local time. Affected Medium: SOIL SOIL ____________________________________________________________________________ SUSPECTED RESPONSIBLE PARTY Organization: EXPLORER PIPELINE TULSA , OK 74101 Type of Organization: PRIVATE ENTERPRISE ____________________________________________________________________________ INCIDENT LOCATION 1/2 MILE NORTH 1/2 MILE WEST County: ATOKA INTERSECTION OF OVERLAND TRAIL AND BUTTERFIELD City: CANEY, OKLAHOMA State: OK Distance from City: 10.5 MILES Direction from City: WNW Latitude: 34° 17' 34" N Longitude: 096° 20' 50" W Section: 15 Township: 3S Range: 9E MP 398.8 GREENVILLE TO GLENPOOL 28 NE/4 SW/4 S15 R3S T9E ATOKA COUNTY, ____________________________________________________________________________ RELEASED MATERIAL(S) CHRIS Code: ODS Official Material Name: OIL: DIESEL Also Known As: FUEL OIL - DIESEL 2 Qty Released: 0 UNKNOWN AMOUNT ____________________________________________________________________________ DESCRIPTION OF INCIDENT REPORTING A PIPELINE RELEASE. NO FREE PRODUCT AT THIS TIME. NO IMPACT TO WATER. DEAD VEGETATION ON ROW AND SMELL OF PETROLEUM PRODUCT IN SOIL. EXCAVATION AND ENVIRONMENTAL CONTRACTORS ON SITE IN ADDITION TO COMPANY PERSONNEL. WILL BEGIN EXCAVATION TONIGHT TO DETERMINE THE EXTENT OF OF INCIDENT. REPORTING AT THIS TIME DUE TO COSTS EXPECTED TO EXCEED $50,000. NO VOLUME ESTIMATE AVAILABLE. ____________________________________________________________________________ INCIDENT DETAILS Pipeline Type: TRANSMISSION DOT Regulated: YES Pipeline Above/Below Ground: BELOW Exposed or Under Water: NO Pipeline Covered: UNKNOWN ____________________________________________________________________________ DAMAGES Fire Involved: NO Fire Extinguished: UNKNOWN INJURIES: NO Hospitalized: Empl/Crew: Passenger: FATALITIES: NO Empl/Crew: Passenger: Occupant: EVACUATIONS: NO Who Evacuated: Radius/Area: Damages: YES $50000 Length of Direction of Closure Type Description of Closure Closure Closure http://www.nrc.uscg.mil/reports/rwservlet?standard web+inc _ _ seq=915209 11/9/2010#

Page 6Page 2 of 2 Air: N Road: N Major Artery: N Waterway: N Track: N Passengers Transferred: NO Environmental Impact: YES/VEGETATION Media Interest: NONE Community Impact due to Material: ____________________________________________________________________________ REMEDIAL ACTIONS EXCAVATION AND ENVIRONMENTAL CONTRACTORS ON-SITE. Release Secured: YES Release Rate: Estimated Release Duration: ____________________________________________________________________________ WEATHER Weather: PARTLY CLOUDY, 90ºF Wind speed: 15 MPH Wind direct ____________________________________________________________________________ ADDITIONAL AGENCIES NOTIFIED Federal: N/A State/Local: OKLAHOMA CORPORATION COMMISSION State/Local On Scene: N/A State Agency Number: N/A ____________________________________________________________________________ NOTIFICATIONS BY NRC USCG ICC (ICC ONI) 17-AUG-09 19:34 COLORADO INFO ANALYSIS CENTER (FUSION CENTER) 17-AUG-09 19:34 DOT CRISIS MANAGEMENT CENTER (MAIN OFFICE) 17-AUG-09 19:34 U.S. EPA VI (MAIN OFFICE) 17-AUG-09 19:38 NATIONAL INFRASTRUCTURE COORD CTR (MAIN OFFICE) 17-AUG-09 19:34 NOAA RPTS FOR OK (MAIN OFFICE) 17-AUG-09 19:34 OFC OF ENV SVC CHEROKEE NATIONS OK (MAIN OFFICE) 17-AUG-09 19:34 PIPELINE & HAZMAT SAFETY ADMIN (OFFICE OF PIPELINE SAFETY (AUTO)) 17-AUG-09 19:34 PIPELINE & HAZMAT SAFETY ADMIN (OFFICE OF PIPELINE SAFETY WEEKDAYS (VERBAL)) 17-AUG-09 19:39 DEQ OKLAHOMA (MAIN OFFICE) 17-AUG-09 19:34 WEB REPORT (WEB REPORT SUBMITTER) 17-AUG-09 19:34 ____________________________________________________________________________ ADDITIONAL INFORMATION ///////WEB REPORT////// ___________________________________________________________________________ *** END INCIDENT REPORT # 915209 *** http://www.nrc.uscg.mil/reports/rwservlet?standard web+inc _ _ seq=915209 11/9/2010#

Page 7Appendix B ODES Report 2009 0261#

Page 8NOTICE: This report is required by 49 CFR Part 195. Failure to report can result in a civil penalty not to exceed $25,000 for each violation for each day that such violation persists except that the maximum civil penalty shall not exceed $500,000 as provided in 49 USC 60122 Form Approved OMB No. 2137-0047 U.S. Department of Transportation Research and Special Programs Administration ACCIDENT REPORT – HAZARDOUS LIQUID PIPELINE SYSTEMS Report Date No. (DOT Use Only) 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 Office Of Pipeline Safety Web Page at http://ops.dot.gov. PART A – GENERAL REPORT INFORMATION Original Report Supplemental Report Final Report 1. a. Operator's OPS 5-digit Identification Number (if known) / ____________/ 2. b. If Operator does not own the pipeline, enter Owner’s OPS 5-digit Identification Number (if known) / ___ / c. Name of Operator ______________________________________________________________________________________ d. Operator street address _______________________________________________________________________________ e. Operator address ______________________________________________________________________________________ City, County, State and Zip Code IMPORTANT: IF THE SPILL IS SMALL, THAT IS, THE AMOUNT IS AT LEAST 5 GALLONS BUT IS LESS THAN 5 BARRELS, COMPLETE THIS PAGE ONLY, UNLESS THE SPILL IS TO WATER AS DESCRIBED IN 49 CFR §195.52(A)(4) OR IS OTHERWISE REPORTABLE UNDER §195.50 AS REVISED IN CY 2001. 2. Time and date of the accident / / / / / / / / hr. month day year 3. Location of accident (If offshore, do not complete a through d. See Part C.1) a. Latitude: _____ Longitude: __________ (if not available, see instructions for how to provide specific location) b. _________________________________________________ City, and County or Parish c. _________________________________________________ State and Zip Code d. Mile post/valve station or survey station no. (whichever gives more accurate location) _________________________________ 4. Telephone report / / / / / / / / NRC Report Number month day year 5. Losses (Estimated) Public/Community Losses reimbursed by operator: Public/private property damage $_______________ Cost of emergency response phase $_______________ Cost of environmental remediation $_______________ Other Costs $_______________ (describe) _____________________________________ Operator Losses: Value of product lost $_______________ Value of operator property damage $_______________ Other Costs $_______________ (describe) _____________________________________ Total Costs $_______________ 6. Commodity Spilled Yes No (If Yes, complete Parts a through c where applicable) a. Name of commodity spilled ___________________________ b. Classification of commodity spilled: HVLs /other flammable or toxic fluid which is a gas at ambient conditions CO2 or other non-flammable, non-toxic fluid which is a gas at ambient conditions Gasoline, diesel, fuel oil or other petroleum product which is a liquid at ambient conditions Crude oil c. Estimated amount of commodity involved : Barrels Gallons (check only if spill is less than one barrel) Amounts: Spilled : ____________ Recovered: ____________ CAUSES FOR SMALL SPILLS ONLY (5 gallons to under 5 barrels) : (For large spills [5 barrels or greater] see Part H) Corrosion Natural Forces Excavation Damage Other Outside Force Damage Material and/or Weld Failures Equipment Incorrect Operation Other PART B – PREPARER AND AUTHORIZED SIGNATURE (type or print) Preparer's Name and Title Preparer's E-mail Address Area Code and Telephone Number Area Code and Facsimile Number Authorized Signature (type or print) Name and Title Date Area Code and Telephone Number Form RSPA F 7000-1 ( 01-2001 ) Page 1 of 4 OPS Data Facsimile#

Page 9PART C – ORIGIN OF THE ACCIDENT (Check all that apply) 1. Additional location information a. Line segment name or ID _______________________ b. Accident on Federal land other than Outer Continental Shelf Yes No c. Is pipeline interstate? Yes No Offshore: Yes No (complete d if offshore) d. Area ___________________ Block # ______________ State / / or Outer Continental Shelf 2. Location of system involved (check all that apply) Operator’s Property Pipeline Right of Way High Consequence Area (HCA)? Describe HCA____________________________________ 3. Part of system involved in accident Above Ground Storage Tank Cavern or other below ground storage facility Pump/meter station; terminal/tank farm piping and equipment, including sumps Other Specify: _________________________________ Onshore pipeline, including valve sites Offshore pipeline, including platforms If failure occurred on Pipeline, complete items a - g: 4. Failure occurred on Body of Pipe Pipe Seam Scraper Trap Pump Sump Joint Component Valve Metering Facility Repair Sleeve Welded Fitting Bolted Fitting Girth Weld Other (specify) Year the component that failed was installed: / / 5. Maximum operating pressure (MOP) a. Estimated pressure at point and time of accident: ____ PSIG b. MOP at time of accident: ___________PSIG c. Did an overpressurization occur relating to the accident? Yes No a. Type of leak or rupture Leak: Pinhole Connection Failure (complete sec. H5) Puncture, diameter (inches) _________ Rupture: Circumferential – Separation Longitudinal – Tear/Crack, length (inches) __________ Propagation Length, total, both sides (feet) _________ N/A Other _______________________________ b.Type of block valve used for isolation of immediate section: Upstream: Manual Automatic Remote Control Check Valve Downstream: Manual Automatic Remote Control Check Valve c. Length of segment isolated _______ ft d. Distance between valves _______ ft e. Is segment configured for internal inspection tools? Yes No f. Had there been an in-line inspection device run at the point of failure? Yes No Don’t Know Not Possible due to physical constraints in the system g. If Yes, type of device run (check all that apply) High Resolution Magnetic Flux tool Year run: ______ Low Resolution Magnetic Flux tool Year run: ______ UT tool Year run: ______ Geometry tool Year run: ______ Caliper tool Year run: ______ Crack tool Year run: ______ Hard Spot tool Year run: ______ Other tool Year run: ______ PART D – MATERIAL SPECIFICATION PART E – ENVIRONMENT 1. Nominal pipe size (NPS) / / in. 2. Wall thickness / / in. 3. Specification SMYS / / 4. Seam type 5. Valve type 6. Manufactured by in year / / 1. Area of accident In open ditch Under pavement Above ground Underground Under water Inside/under building Other ____________ 2. Depth of cover: inches PART F – CONSEQUENCES 1. Consequences (check and complete all that apply) a. Fatalities Injuries c. Product ignited Yes No d. Explosion Yes No Number of operator employees: _______ _______ e. Evacuation (general public only) / / people Contractor employees working for operator: _______ _______ Reason for Evacuation: General public: _______ _______ Precautionary by company Totals: _______ _______ Evacuation required or initiated by public official b. Was pipeline/segment shutdown due to leak? Yes No f. Elapsed time until area was made safe: If Yes, how long? ______ days ______ hours _____ minutes / / hr. / / min. 2. Environmental Impact a. Wildlife Impact: Fish/aquatic Yes No e. Water Contamination: Yes No (If Yes, provide the following) Birds Yes No Amount in water _________ barrels Terrestrial Yes No Ocean/Seawater No Yes b. Soil Contamination Yes No Surface No Yes If Yes, estimated number of cubic yards: _________ Groundwater No Yes c. Long term impact assessment performed: Yes No Drinking water No Yes (If Yes, check below.) d. Anticipated remediation Yes No Private well Public water intake If Yes, check all that apply: Surface water Groundwater Soil Vegetation Wildlife Form RSPA F 7000-1 ( 01-2001 ) OPS Data Facsimile Page 2 of 4#

Page 10PART G – LEAK DETECTION INFORMATION 1. Computer based leak detection capability in place? 2. Was the release initially detected by? (check one): Yes No CPM/SCADA-based system with leak detection Static shut-in test or other pressure or leak test Local operating personnel, procedures or equipment Remote operating personnel, including controllers Air patrol or ground surveillance A third party Other (specify) _________________ 3. Estimated leak duration days ____ hours ____ PART H – APPARENT CAUSE Important: There are 25 numbered causes in this Part H. Check the box corresponding to the primary cause of the accident. Check one circle in each of the supplemental categories corresponding to the cause you indicate. See the instructions for guidance. H1 – CORROSION 1. External Corrosion 2. Internal Corrosion (Complete items a – e where applicable.) b. Visual Examination Localized Pitting General Corrosion Other ____________________ a. Pipe Coating c. Cause of Corrosion Bare Galvanic Atmospheric Coated Stray Current Microbiological Cathodic Protection Disrupted Stress Corrosion Cracking Selective Seam Corrosion Other ____________________ d. Was corroded part of pipeline considered to be under cathodic protection prior to discovering accident? No Yes, Year Protection Started: / / e. Was pipe previously damaged in the area of corrosion? No Yes => Estimated time prior to accident: / / years / / months Unknown H2 – NATURAL FORCES 3. Earth Movement => Earthquake Subsidence Landslide Other 4. Lightning 5. Heavy Rains/Floods => Washouts Flotation Mudslide Scouring Other 6. Temperature => Thermal stress Frost heave Frozen components Other 7. High Winds H3 – EXCAVATION DAMAGE 8. Operator Excavation Damage (including their contractors/Not Third Party) 9. Third Party (complete a-f) a. Excavator group General Public Government Excavator other than Operator/subcontractor b. Type: Road Work Pipeline Water Electric Sewer Phone/Cable Landowner-not farming related Farming Railroad Other liquid or gas transmission pipeline operator or their contractor Nautical Operations Other ________ c. Excavation was: Open Trench Sub-strata (boring, directional drilling, etc…) d. Excavation was an ongoing activity (Month or longer) Yes No e. Did operator get prior notification of excavation activity? If Yes, Date of last contact /_________/ Yes; Date received: / / mo. / / day / ______/ yr. No Notification received from: One Call System Excavator Contractor Landowner f. Was pipeline marked as result of location request for excavation? No i. Temporary markings: Flags Stakes Paint ii. Permanent markings: iii. Marks were (check one) : Accurate Not Accurate iv. Were marks made within required time? Yes No H4 – OTHER OUTSIDE FORCE DAMAGE 10. Fire/Explosion as primary cause of failure => Fire/Explosion cause: Man made Natural 11. Car, truck or other vehicle not relating to excavation activity damaging pipe 12. Rupture of Previously Damaged Pipe 13. Vandalism Yes (If Yes, check applicable items i - iv) Form RSPA F 7000-1 ( 01-2001 ) Page 3 of 4 OPS Data Facsimile#

Page 11H5 – MATERIAL AND/OR WELD FAILURES Material 14. Body of Pipe => Dent Gouge Bend Arc Burn Other 15. Component => Valve Fitting Vessel Extruded Outlet Other 16. Joint => Gasket O-Ring Threads Other Weld 17. Butt => Pipe Fabrication Other 18. Fillet => Branch Hot Tap Fitting Repair Sleeve Other 19. Pipe Seam => LF ERW DSAW Seamless Flash Weld HF ERW SAW Spiral Other Complete a-g if you indicate any cause in part H5. a. Type of failure: Construction Defect => Poor Workmanship Procedure not followed Poor Construction Procedures Material Defect b. Was failure due to pipe damage sustained in transportation to the construction or fabrication site? Yes No c. Was part which leaked pressure tested before accident occurred? Yes, complete d-g No d. Date of test: / / yr. / / mo. / / day e. Test medium: Water Inert Gas Other f. Time held at test pressure: / / hr. g. Estimated test pressure at point of accident: PSIG H6 – EQUIPMENT 20. Malfunction of Control/Relief Equipment => Control valve Instrumentation SCADA Communications Block valve Relief valve Power failure Other 21. Threads Stripped, Broken Pipe Coupling => Nipples Valve Threads Dresser Couplings Other 22. Seal Failure => Gasket O-Ring Seal/Pump Packing Other H7 – INCORRECT OPERATION 23. Incorrect Operation a. Type: Inadequate Procedures Inadequate Safety Practices Failure to Follow Procedures Other _______________________________________ b. Number of employees involved who failed a post-accident test: drug test: / / alcohol test /_________/ H8 – OTHER 24. Miscellaneous, describe: 25. Unknown Investigation Complete Still Under Investigation (submit a supplemental report when investigation is complete) PART I – NARRATIVE DESCRIPTION OF FACTORS CONTRIBUTING TO THE EVENT (Attach additional sheets as necessary) Form RSPA F 7000-1 (01-2001 ) Page 4 of 4 OPS Data Facsimile#

Page 12Appendix C Metallurgical Report Privileged and Confidential#

Page 13• DNV DET NORSKE VERITAS Final Report Metallurgical Analysis of 28-Inch Diameter Double Submerged Arc-Welded Longitudinal Seam Explorer Pipeline Company Tulsa, Oklahoma Report No./DNV Reg No.: ENAUS813BPADG (EP008510) December 31, 2009 Privileged and Confidential#

Page 14Appendix D Incident Summary Privileged and Confidential#

Page 15DNV Det Norske Veritas Final Report Atoka MP 398 Incident Summary Explorer Pipeline Company Tulsa, Oklahoma Report No./DNV Reg. No.: ANEUS822TARP (20100728) - Version 1 August 02, 2010 Privileged and Confidential#