DELEK LOGISTICS OPERATING, LLC.

Incident Narrative

A MEMBER OF AS LOCAL HUNTING CLUB CALLED PALINE 800 NUMBER LISTED ON THE PIPELINE MARKERS INDICATING THERE WAS CRUDE OIL ON THE RIGHT-OF-WAY. THE PIPELINE WAS NOT IN OPERATION AT THE TIME OF THE CALL AND HAD BEEN DOWN FOR SEVERAL HOURS ONCE SCHEDULED SHIPMENTS HAD BEEN COMPLETED. PALINE'S LOCAL OPERATIONS PERSON WAS DISPATCHED TO THE SITE BUT ARRIVED NEAR DARK AND DETERMINED CRUDE OIL WAS IN THE VICINITY OF THE PALINE RIGHT-OF-WAY. A PIPELINE MAINTENANCE CREW/HAZWOPER QUALIFIED WAS DISPATCHED TO THE SITE AND DISCOVERED THE SOURCE WAS THE PALINE PIPELINE. A COMPANY CONTRACTED OSRO WAS DISPATCHED. OIL WAS CONTAINED IN A LOW AREA THAT WAS NOT NORMALLY A WATERWAY, BUT HAD ACCUMULATED A LARGE POOL OF WATER AFTER RECENT HEAVY RAINS. PIPELINE WAS REPAIRED AND A RESTART PLAN WAS SUBMITTED TO THE RAILROAD COMMISSION OF TEXAS AND THE PIPELINE WAS RESTARTED AT REDUCED PRESSURE. REDUCED PRESSURE HAS BEEN AND WILL BE MAINTAINED UNTIL THE PIPE SEGMENT CAN BE HYDROSTATICALLY TESTED, PRESENTLY SCHEDULED FOR JULY 2016. <UPDATE: PIPE SEGMENT WAS HYDROSTATICALLY TESTED TO A NOMINAL 1200 PSIG ON AUGUST 10, 2016 WITHOUT LEAK. PIPE MOP RETURNED TO NORMAL AFTER TEST> PIPE SEGMENT REMOVED WAS SENT TO ANDERSON & ASSOCIATES METALLURGICAL LAB. THEIR REPORT FAILURE WAS VERY LOCALIZED EXTERNAL PITTING. NO CRACKING WAS VISIBLE & PIPE EXHIBITED A 40,000 PSI YIELD STRENGTH.