HILCORP ALASKA, LLC

Incident Narrative

ON FEBRUARY 7, 2017, HILCORP ALASKA, LLC (HILCORP) DISCOVERED A NATURAL GAS LEAK FROM AN 8-INCH FUEL GAS PIPELINE (""A"" PIPELINE) SERVING PLATFORMS IN COOK INLET'S MIDDLE GROUND SHOAL (MGS) FIELD. THE LEAK WAS CONFIRMED BY AN AERIAL PATROL DISPATCHED BY PIPELINE OPERATORS, AND WAS PROMPTLY REPORTED TO THE NATIONAL RESPONSE CENTER, THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, THE PHMSA ANCHORAGE OFFICE, AND OTHERS. PIPELINE PRESSURE WAS REDUCED, AND INSPECTION AND REPAIR PLANNING INITIATED. THE CAUSE OF THE NATURAL GAS LEAK WAS A PIPE BODY FAILURE DUE TO MECHANICAL ABRASION. THE MECHANICAL ABRASION RESULTED FROM THE CONTACT BETWEEN THE PIPELINE AND A SUBMERGED ROCK RESTING ON THE SEAFLOOR. INSPECTION AND REPAIR OF THE LEAK WERE COMPLICATED BY WINTER CONDITIONS IN COOK INLET. LARGE FLOATING ICE PANS, BROKEN UP ICE AND LIMITED DAYLIGHT PREVENTED THE IMMEDIATE DISPATCH OF DIVERS TO INSPECT AND CONTAIN THE LEAK. IN RESPONSE TO THE GAS LEAK, HILCORP IMPLEMENTED A MULTI-COMPONENT ENVIRONMENTAL SAMPLING AND MONITORING WORK PLAN TO QUANTIFY ANY POTENTIAL ENVIRONMENTAL IMPACTS ASSOCIATED WITH THE GAS LEAK. HILCORP SUBMITTED WEEKLY SAMPLING AND MONITORING DATA SUMMARY REPORTS TO ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION (ADEC) FOR TEN CONSECUTIVE WEEKS. THE RESULTS FROM THE SAMPLING AND MONITORING PROGRAM DID NOT IDENTIFY ANY SIGNIFICANT CHANGES THAT WOULD SUGGEST HARM TO THE ENVIRONMENT OR WILDLIFE AS A RESULT OF THE LEAK. HILCORP DETERMINED THAT SHUTTING IN THE PIPELINE WOULD CAUSE SEAWATER TO ENTER THE DEPRESSURIZED PIPELINE THROUGH THE LEAK, LIKELY DISPLACING AND MOBILIZING RESIDUAL OIL REMAINING IN PIPELINE FROM A PRIOR OPERATOR'S 2005 CONVERSION OF SERVICE FROM CRUDE OIL TO NATURAL GAS. THE GAS PIPELINE SUPPLIES HEAT, LIGHT AND POWER TO MGS PLATFORMS, LOSS OF WHICH WOULD ELIMINATE NAVIGATIONAL AID LIGHTING AND CATHODIC PROTECTION FOR THE FUEL LINE, PLATFORMS, AND ASSOCIATED PIPELINES. A LACK OF FUEL GAS COULD PUT THE HEALTH AND SAFETY OF PLATFORM OPERATORS AT RISK AND LEAD TO DAMAGE TO THE PLATFORMS AND OTHER INFRASTRUCTURE, AND COULD HAVE CAUSED PRODUCTION LINES TO FREEZE, CREATING A POTENTIAL SOURCE FOR AN OIL SPILL WHEN THE LINES THAWED. ON MARCH 25, 2017, HILCORP REDUCED PIPELINE PRESSURE FROM 145 PSI TO 65 PSI; THE PRESSURE CALCULATED TO BE PROPORTIONAL TO THE DIFFERENTIAL PRESSURE OF WATER AT THE PIPE WALL. MAINTAINING POSITIVE PRESSURE IN THE PIPELINE WAS NECESSARY TO AVOID THE LIKELY RELEASE OF RESIDUAL HYDROCARBONS INSIDE THE PIPELINE. HILCORP CONTRACTED A DIVE TEAM WHO STOPPED THE LEAK BY INSTALLING A TEMPORARY CLAMP ON APRIL 13, 2017. BY LETTER DATED MARCH 3, 2017, PHMSA ISSUED A NOTICE OF PROPOSED SAFETY ORDER TO HILCORP RELATED TO THE MGS FUEL GAS LINE. PHMSA AND HILCORP ENTERED INTO A CONSENT AGREEMENT AND ORDER, EFFECTIVE APRIL 12, 2017. PHMSA APPROVED A LEAK INSPECTION AND PERMANENT REPAIR PLAN ON MAY 9 AND DIVERS INSTALLED A PERMANENT REPAIR CLAMP IN PLACE OF THE TEMPORARY CLAMP. DIVERS SUCCESSFULLY TESTED THE PERMANENT CLAMP SEAL ON MAY 20, COMPLETING THE REPAIR PROCESS. THE CAUSE OF THE LEAK WAS CONFIRMED BY DIVERS TO BE EXTERNAL FORCE DAMAGE; ABRASION OF THE PIPELINE BODY FROM CONTACT WITH A SUBMERGED ROCK RESTING ON THE SEAFLOOR. TO MITIGATE THE RISK OF FUTURE ABRASION OF THE PIPELINE, DIVERS STABILIZED THE PIPE AT THE LEAK LOCATION TO PREVENT PIPE MOVEMENT. HILCORP PERFORMED A SONAR INSPECTION OF THE SUBMERGED PIPELINE ROW ON JUNE 21. AN ILI ASSESSMENT OF THE 8-INCH ""A"" PIPELINE, FROM MGS PLATFORM A TO SHORE, WAS COMPLETED JULY 19. HILCORP SUCCESSFULLY PERFORMED A PRESSURE TEST OF THE LINE ON SEPTEMBER 9, AND NORMAL FUEL GAS OPERATIONS RESUMED ON SEPTEMBER 16. HILCORP WILL CONTINUE VARIOUS INSPECTIONS, IN ACCORDANCE WITH THE APRIL 12, 2017 CONSENT AGREEMENT AND ORDER. HILCORP INTEGRATED SONAR AND ILI DATA TO PRIORITIZE DIVER INSPECTIONS AND MITIGATION MEASURES. DIVERS COMPLETED INSPECTIONS THEN ARMORED AND STABILIZED THE PIPELINE AT LOCATIONS IDENTIFIED BY DATA INTEGRATION.