Delmont Line 27 Incident Update

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1 Pennsylvania Public Utility Commission Delmont Line 27 Incident Update July 21, 2016

2 Agenda Introductions Penn-Jersey system overview Incident and preliminary cause Texas Eastern actions and commitments Potential customer impacts Questions Spectra Energy Partners 2

3 Spectra Energy: U.S. Gas Transmission SE US Gas 12,660 miles in 26 states Texas Eastern 9,075 miles in 17 states Spectra Energy Partners 3

4 Texas Eastern in Pennsylvania Incident location Texas Eastern (PA) 2,070 miles SE Employees in PA 220 Spectra Energy Partners 4

5 Penn-Jersey System Incident location Original Construction Line Line through 1968 Line through 1988 Line and 1986 through 2015 Pipeline Integrity All lines were hydrostatically tested during construction Pipelines have been in-line inspected, except a few short sections Spectra Energy Partners 5

6 Delmont Line 27 Failure Pipeline rupture and fire occurred on April 29, 2016 Four parallel pipelines located in the ROW at failure site Isolation valves for all four lines shut in within one hour Community impacts PHMSA issued Corrective Action Order on May 3 PHMSA s preliminary investigation identified evidence of corrosion along two circumferential girth welds The pattern of corrosion indicated a possible flaw in the girth weld coating Metallurgical testing confirmed that significant external corrosion was present at the failure site TETLP has initiated a Root Cause Analysis Spectra Energy Partners 6

7 Delmont Line 27 Failure Location Installed in 1981 Class 1 location 30-inch x inch wall thickness, X-65 1,050 psig MAOP 60% SMYS Fusion-bonded epoxy pipe coating Tape coating on girth welds In-line inspected in 2005 and ILI identified 33% wall loss at failure location Did not meet criteria for investigation Spectra Energy Partners 7

8 TETLP Actions Conservative approach to verify integrity of all Penn-Jersey System pipelines Records review of girth-weld coatings for all pipelines on the Penn-Jersey System Lines 12 and 19 were constructed prior to use of tape coatings Line 27 has the most tape coatings Developed model for evaluating circumferential anomalies to supplement current industry models for axial anomalies Initiated a detailed review of most recent ILI data for the Penn-Jersey System ILI is an effective way to identify potential corrosion issues Identified anomalies for excavation and evaluation Evaluating site specific conditions that may have contributed to the failure Self-imposed temporary pressure reduction to 832 psig implemented for all lines from Armagh Compressor Station to Lambertville Compressor Station Conservative approach until we conduct more evaluations Provide safety during excavations and evaluations Addressing requirements of Corrective Action Order Spectra Energy Partners 8

9 TETLP Commitments ILI reassessments for all Penn-Jersey lines with ILI surveys performed prior to 2014 on a prioritized basis Hydrostatic test Line 27 Delmont Compressor Station to mile post 15.5 Work scheduled for completion by Nov. 1 Prioritize work for most capacity benefit Plan to restore full MAOP by pipeline segment as work is completed, subject to PHMSA concurrence Schedule is dependent on environmental permitting as well as any change in direction from PHMSA Spectra Energy Partners 9

10 Historical Flow Rates 3,000,000 Delmont Flow 2,500,000 2,000,000 1,500,000 1,000, , /1 5/15 5/29 6/12 6/26 7/10 7/24 8/7 8/21 9/4 9/18 10/2 10/16 10/30 11/13 11/27 12/11 12/25-500,000 Scheduled Volume 2014 Scheduled Volume 2015 Scheduled Volume 2016 Spectra Energy Partners 10

11 Historical Flow Rates 3,500,000 Perulack Flow 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , /1 5/15 5/29 6/12 6/26 7/10 7/24 8/7 8/21 9/4 9/18 10/2 10/16 10/30 11/13 11/27 12/11 12/25 Scheduled Volume 2014 Scheduled Volume 2015 Scheduled Volume 2016 Spectra Energy Partners 11

12 Historical Flow Rates 2,500,000 Chambersburg Flow 2,000,000 1,500,000 1,000, , /1 5/15 5/29 6/12 6/26 7/10 7/24 8/7 8/21 9/4 9/18 10/2 10/16 10/30 11/13 11/27 12/11 12/25 Scheduled Volume 2014 Scheduled Volume 2015 Scheduled Volume 2016 Spectra Energy Partners 12

13 Penn-Jersey System Operating Status 1,162 2,661 LINE 12 LINE 19 LINE 27 LINE 28 1,418 2,951 1,418 2,950 1,415 2,943 1,953 3,506 1,947 3,493 1,899 3,422 1,749 3,263 1,608 3,098 1,500 2, Location of rupture M I L E S o f P I P E Normal service 832 PSIG 800 PSIG Out of service Current capacity Normal winter capacity Spectra Energy Partners 13

14 Penn-Jersey System Operating Status 1,829 2,661 LINE 12 LINE 19 LINE 27 LINE 28 2,120 2,951 2,165 2,950 2,160 2,943 2,187 3,506 2,184 3,493 2,110 3,422 1,960 3,263 1,800 3,098 1,404 2, Location of rupture M I L E S o f P I P E Normal service 832 PSIG 800 PSIG Out of service Winter capacity Normal winter capacity Spectra Energy Partners 14

15 Penn-Jersey System Operating Status 1,829 2,661 LINE 12 LINE 19 LINE 27 LINE 28 2,120 2,951 2,165 2,950 2,160 2,943 2,387 3,506 2,381 3,493 2,307 3,422 2,155 3,263 1,994 3,098 1,597 2, Location of rupture M I L E S o f P I P E Normal service 832 PSIG 800 PSIG Out of service Winter capacity Normal winter capacity Spectra Energy Partners 15

16 Penn-Jersey System Operating Status 1,829 2,661 LINE 12 LINE 19 LINE 27 LINE 28 2,120 2,951 2,165 2,950 2,160 2,943 2,583 3,506 2,583 3,493 2,509 3,422 2,357 3,263 2,195 3,098 1,799 2, Location of rupture M I L E S o f P I P E Normal service 832 PSIG 800 PSIG Out of service Winter capacity Normal winter capacity Spectra Energy Partners 16

17 Penn-Jersey System Operating Status 1,829 2,661 LINE 12 LINE 19 LINE 27 LINE 28 2,120 2,951 2,165 2,950 2,160 2,943 2,728 3,506 2,717 3,493 2,645 3,422 2,494 3,263 2,335 3,098 1,940 2, Location of rupture M I L E S o f P I P E Normal service 832 PSIG 800 PSIG Out of service Winter capacity Normal winter capacity Spectra Energy Partners 17

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