MEDALLION OPERATING COMPANY, LLC

Incident Narrative

ON MONDAY, NOVEMBER 19, 2018, AT 12:30 P.M. LOCAL TIME, MEDALLION OPERATING'S HOWARD FACILITY, KNOWN AS THE HOWARD STATION, IN HOWARD COUNTY, TEXAS, DEVELOPED A PIN HOLE LEAK ON A 3"" CARBON STEEL ELBOW. THE INCIDENT OCCURRED AT A 3"" BYPASS AROUND AN ACTUATED VALVE WITHIN THE STATION PIPPING. A MEDALLION PIPELINE TECHNICIAN IMMEDIATELY CONTACTED MEDALLION'S CONTROL CENTER PROVIDING NOTIFICATION OF THE LEAK AND REQUESTED THE FACILITY TO BE PLACED IN BYPASS. THE BYPASS WAS COMPLETED AT 12:35 P.M. LOCAL TIME, WHICH SHUT OFF THE FLOW OF OIL TO THROUGH THE AFFECTED PIPING. A TOTAL OF 2 BBLS WAS RELEASED AND APPROXIMATELY 1.5 BBL WAS RECOVERED BY VACUUM TRUCK. THE REMAINING CONTAMINATED SOILED WAS TREATED IN-PLACE AND HAS BEEN REMEDIATED BELOW CLOSURE LEVELS. AT APPROXIMATELY 13:30 P.M. LOCAL TIME, MEDALLION'S CONTRACTORS ARRIVED ON LOCATION TO START REPAIRS. THE ELBOW WAS COLD CUT ALONG WITH ADJACENT PIPING AND VISUALLY INSPECTED. THE VISUAL INSPECTION INDICATED THE 3"" ELBOW HAD DEVELOPED A SMALL PINHOLE AND MEDALLION HAS SUBMITTED THE AFFECTED ELBOW AND PIPING TO AN INDEPENDENT SUBJECT MATTER EXPERT (METALLURGIST) FOR REVIEW AND ANALYSIS. THE RESULTS OF THE ANALYSIS ARE PENDING AT THE TIME OF THIS INITIAL REPORT. THE REMAINING SECTION OF PIPING ON THE 3"" BYPASS WAS REMOVED AND REPLACED WITH NEW MATERIAL. AT 19:10 P.M. LOCAL TIME, THE REPAIRS WERE COMPLETED AND THE STATION (AFFECTED PIPING) WAS PLACES BACK IN SERVICE. AN SUPPLEMENT WILL BE PROVIDED, AFTER THE METALLURGIST REPORT IS RECEIVED AND REVIEWED. UPDATE: THE INVESTIGATION AND METALLURGICAL REPORT INDICATED MORE THAN ONE FACTOR ATTRIBUTED TO THE ACCIDENT. EACH OF THE FOLLOWING HAS BEEN IDENTIFIED AS A CONTRIBUTING FACTOR, A METALLURGICAL DEFECT IN THE 90 IN THE HEAT AFFECTED ZONE OF THE WELD, WATER / OIL INTERFACE CORROSION AND THE METALLURGICAL REPORT INDICATED A POTENTIAL CAUSE WAS DUE TO EROSION CORROSION. DUE TO THE UNIQUE CONTRIBUTING FACTORS THE FAILURE OF THE 3"" 90, MEDALLION ADDED AN 3"" VALVE TO THE BYPASS LINE TO ELIMINATE A DEAD LEG IN THE PIPING WHEN THE BYPASS IS NOT IN USE.