EAGLE US 2 LLC

Incident Narrative

ON OCTOBER 31, 2012 THE WEEKLY AERIAL PIPELINE PATROL DISCOVERED A POSSIBLE LEAK (AN ICE PATCH ON THE GROUND) ON THE UNDERGROUND PORTION OF THE 8 INCH ORANGE ETHYLENE PIPELINE APPROXIMATELY 300 YARDS WEST OF THE VINTON DRAINAGE DITCH AND APPROXIMATELY 100 YARDS NORTH OF THE INTER COASTAL CANAL. PIPELINE INSPECTORS VISITED THE SITE AS SOON AS POSSIBLE ON 10/31/2012 TO VERIFY THE LEAK AND TO DETERMINE IF IT WAS ON PPG'S ETHYLENE PIPELINE. AT APPROXIMATELY 16:45 ON 10/31/2012 OPERATIONS BEGAN DEPRESSURIZING THE ETHYLENE PIPELINE WHICH CONTINUED UNTIL 11/5/2012 WHEN PURGING WITH NITROGEN BEGAN. PURGING AND DEPRESSURIZATION TO ATMOSPHERIC PRESSURE WAS COMPLETE ON 11/7/2012. THE LEAK SITE WAS THEN EXCAVATED AND THE SECTION OF LEAKING PIPE WAS REMOVED AND REPLACED WITH NEW 8 INCH, 0.219 WT, GRADE B X42, FBE COATED, PRESSURE TESTED PIPE. A ROOT CAUSE ANALYSIS DETERMINED THAT THE LEAK WAS CAUSED BY EXTERNAL CORROSION DUE TO INDUCED AC CURRENT ON THE PIPELINE AND A SMALL AREA OF DAMAGE TO THE PIPE COATING WHICH EXPOSED THE STEEL PIPE. THE DAMAGE TO THE PIPE COATING WAS THEORIZED TO HAVE BEEN CAUSED BY A PROBE STRIKE THAT OCCURRED WHEN SOMEONE WAS LOCATING THE PIPELINE. THE PIPELINE WAS RETURNED TO SERVICE ON 11/11/2012. AT THE TIME OF THE LEAK PPG PIPELINE SUPERVISION DID NOT BELIEVE THAT THE SITUATION MET THE DEFINITION OF AN INCIDENT AS DEFINED BY 49 CFR 191.3; THE LEAK OCCURRED IN A VERY REMOTE AREA IN THE CALCASIEU PARISH MARSH (AT LEAST 5 MILES TO THE NEAREST DWELLING), THERE WERE NO DEATHS OR INJURIES, NO EXPLOSION OR FIRE, AND ACTUAL CALCULATED GAS LOST WAS 866 MCF (WELL BELOW THE 3 MILLION CUBIC FEET DEFINED AS AN INCIDENT). THE ONLY DIRECT PROPERTY DAMAGE WAS TO A SECTION OF 8 INCH UNDERGROUND PIPING AND THAT REPAIR WAS ESTIMATED TO BE LESS THAN $50,000. THEREFORE, BASED ON THIS INFORMATION, IT WAS CONCLUDED BY PPG'S PIPELINE SUPERVISION THAT NOTIFICATION TO THE NRC WAS NOT REQUIRED AND SUBMISSION OF AN ELECTRONIC WRITTEN REPORT TO PHMSA WITHIN 30 DAYS OF THE EVENT WAS NOT REQUIRED. THIS YEAR PPG'S PIPELINE SUPERVISOR ATTENDED A THIRD PARTY DOT PIPELINE COMPLIANCE TRAINING CLASS AND WAS INFORMED THAT PROPERTY DAMAGE INCLUDED ALL COST ASSOCIATED WITH REPAIRING A LEAK; NOT JUST THE COST FOR THE IMMEDIATE REPAIR TO THE PIPE. AFTER RETURNING TO HIS WORK LOCATION, THE PIPELINE SUPERVISOR LOCATED AN ADVISORY BULLETIN (ADB-02-01) RELEVANT TO THE ISSUE. WITH THE BENEFIT OF THIS ADDITIONAL UNDERSTANDING, THE PPG PIPELINE SUPERVISOR RE-EVALUATED ALL COSTS ASSOCIATED WITH THE REPAIR AND REVALUED THE PROPERTY DAMAGE AS EXCEEDING THE $50,000 THRESHOLD.