Integrity Management Program Special Permits (IMP-SP) Draft Administrative Plan 12/5/2007

1. Integrity Management Program Special Permits(IMP-SP)Draft Administrative Plan12/5/2007

2. IMP Special Permit (IMP-SP) Criteria • Process Criteria • The operator must have an acceptable IMP program • Personnel Criteria • The operator personnel administering and performing the IMP program must be qualified • Technical Criteria • The pipeline segments must satisfy the technical criteria during the baseline inspection period and subsequent reassessment periods

3. Information needed by PHMSA to Satisfy IMP-SP • IMP-SP Plan, Process and Criteria (Joint) • Results of PHMSA audited company program • Process Audit (PHMSA) • Personnel Audit (PHMSA) • Proposed Plan for IMP Segments to be included • Technical proposal (Operator) • Reporting proposal (Operator)

4. IMP-SP Permit Process Timeline • Applicant notifies PHMSA of intent to enter program (Letter of Intent) • The timeline for the initial submission, processing and approval of a Letter of Intent and subsequent information is as follows: • During the month of February, the operator will submit their Letter of Intent (Operator, PHMSA ID, Contact information) • During the month of March and within 30 days of a company’s submission of a company’s Letter of Intent, PHMSA will review the Letter of Intent and notify the operator of tentative approval or rejection • During the period of March 11 through March 31 the company will submit information concerning specific segments for which they intend to include and retain in the special permit for the upcoming year (IMP-SP Application) • During the period of March 11 through June 30 and within 90 days of a companies submission of specific segments, PHMSA will review the specific segment information and notify the operator of approval or rejection • This timeline will allow operators to have approval or rejection prior to the budget process which typically begins in July for the following year’s projects

5. Initial IMP-SP Application(filed after pipeline company receives approval to enter the IMP-SP program from PHMSA based on submittal of Letter of Intent) • Operator Name and Address • PHMSA User ID • Contact information • Description of Segment(s) • Date of last integrity assessment(s) by segment • Date of next integrity assessment(s) by segment • Statement to enter IMP-SP Program signed by operating company officer

6. Applicant IMP-SP Process Criteria • Operator must have a substantially compliant Integrity Management Program (IMP Audit) • Operator must have a substantially compliant Operations and Maintenance program (O&M Audit) • Operator must have a substantially compliant Drug and Alcohol program (D&A Audit) • Operator must have a substantially compliant Public Awareness Program (Plan Review) • Operator records must show appropriate management of the pipeline system (PHMSA Assessment)

7. 1. PHMSA Criteria For IMP-SP Process Acceptance • At least one PHMSA Audit conducted concerning their IMP program • Results of latest PHMSA IMP Audit must be documented by PHMSA and available to applicant within 3 months of IMP audit completion and accepted by PHMSA by November 1 of the previous calendar year to be used in the IMP-SP program process • Unresolved NOPVs as result of the filed IMP audit must be documented by PHMSA and Applicant; good faith effort for unresolved NOPVs will be considered • Unresolved NOAs as a result of filed IMP audit must be documented by PHMSA and Applicant; good faith effort for unresolved NOAs will be considered • PHMSA accepts or denies applicant’s process performance as result of filed IMP audit(s)

8. Applicant Personnel Criteria • Operator must have personnel that are qualified per company’s Operator Qualification Operator Plan and Drug and Alcohol program • Operator must have a management structure which supports operations, maintenance and integrity management with demonstrated commitment to pipeline safety • Operator must have a technical staff or access to experts to determine the technical aspects of the integrity management program and the special permit

9. 2. PHMSA Criteria for IMP-SP Personnel Acceptance • At Least One PHMSA Audit Conducted concerning their Inspection and Maintenance (I&M), Operator Qualification (OQ) and Drug and Alcohol (D&A) Plan program • Results of latest PHMSA I&M, OQ and D&A Audit must be documented by PHMSA and available to applicant within 3 months of audit’s completion and acceptance by PHMSA by November 1 of the previous calendar year to be used in this IMP-SP program • Unresolved NOPVs as result of the filed audits must be documented by PHMSA and Applicant; good faith effort for unresolved NOPVs will be considered • Unresolved NOAs as a result of filed audits must be documented by PHMSA and Applicant; good faith effort for unresolved NOAs will be considered • PHMSA accepts or denies applicant’s process performance as result of these filed audits

10. Applicant IMP-SP Technical Criteria • Inline Inspection (ILI) or pressure test (PT) must have been conducted as the IMP assessment technique on a segment at least one time • Predicted pipeline corrosion rates for a segment must be forecasted and deemed appropriate for proposed extended interval • Post IMP assessment repairs must be documented and analysis performed to determining segment is in satisfactory condition • Segment must not have experienced a reportable incident (30 day) or leak (annual) caused by corrosion; subsequent to an IMP assessment of segment • Pipeline Segments with special conditions (e.g. MIC, SSC, or non-tariff spec gas) require specific analysis to address the special conditions

11. PHMSA Criteria for IMP-SP Technical Acceptance • Documentation provided by applicant should describe the segment and clarify if the segment meets the following criteria • No bare steel pipe • No pipe with ineffective coating systems • No pipe without cathodic protection • No pipe that has not had a hydrostatic pressure test • No pipe that was assessed by other than ILI or hydrostatic pressure test for the IMP program • For pipe with known history of MIC or SCC, the IMP must contain provisions for addressing and managing the threat • PHMSA accepts or denies applicant’s process performance as result of filed technical information

12. Yearly Report & Application for Additional Segments by IMP-SP Participants • Companies will submit an annual report during March of each year. The annual report will include the following: • Confirmation of the company’s Initial IMP-SP Application information • Status of the segments previously approved as part of the IMP-SP • Addition or deletion of any segments to the special permit • Status on the completion of scheduled or unscheduled repairs on the segments