Lessons Learned in MAOP Validation Process August 21, 2012 Chris Foley Vice President RCP Inc. PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS.

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Professional Engineering Consulting Firm Pipeline Regulatory Compliance & Engineering – Asset / Compliance Management Software Applications – Pipeline Integrity Assessment Support – Acquisition Due Diligence – Long-Term Pipeline Compliance / Engineering Staff Support – Hydrotest Planning & Certification MAOP Services – MAOP Studies (as a service) – Turnkey MAOP Validation Services – MAOP Validation Software

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Comprehensive Tool MAOP calculator tool – Analysis as a service & available to operators via license agreement – Comprehensive Gas/Liquid, Onshore/Offshore, Steel/Plastic, Federal/State/LOI’s Identifies potential MAOP deficiencies – Data gaps – Source documentation (gaps and/or questionable quality) – Differences in calculated MAOP vs. established MAOP Links source documents to data (Traceability) – Creates a traceable association between data and source documentation Accepts data sets in various formats (.xls, PODS, APDM) – Historical documentation / manual edits to existing data sets –.xls templates (RCP pre-configured or operator/3 rd party developed) Customizable to fit operator terminology or other specific needs – GIS data models (impartial to type or version) Linear data (stationing/measurement) Non-linear (distribution networks) tolerant

PreparationPilotExecutionResolve DiscrepanciesPrioritize / Mitigate Problem SegmentsOngoing Sustainable Process Turnkey MAOP Validation Process

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Preparation Evaluate current MAOP process Determine document quality and grading standards – Single vs. complimentary document types Deliverables & sustainability goals – Source document gaps, MAOP calculation variances, correct GIS data – Link source documents to MAOP calculated variables – Map process flow & update procedures Imaging – Electronic library Data repository – MAOP calculator / Reporting capabilities (slice & dice) Location for document review – Main office, field office, off-site # of people and their roles – Schedule, miles of pipeline, record quantity, record quality

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Pilot Small grouping – System location / type / pre or post regulation – Source document type Hydrotest, Alignment sheets Source Documentation – One touch philosophy – Organize / Index Test and improve MAOP validation process design

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. MAOP Execution Process Flow Diagram Source Documents Source Document Data Set GIS Data (PODS, APDM, etc.) Combined MAOP Data Set (Raw) Validated MAOP Data Set “Calculator Ready” MAOP Data Set Source Document Imaging to Electronic Library RCP Document Review & Data Extraction Capture MAOP Data to MaxOp ® Attach Cover Sheet and Return to Box QC Box (Revise as Necessary) Flag Issues That Require Operator Feedback Operator SME Review and Gap Closure Station Corrections Pipeline Identification “Smart” Segmentation Assign Default Values Resolve Data Gaps Run MaxOp ® Calculator MAOP Calculation Results Established MAOP vs. Calculated MAOP Validated MAOP Segments Non-Validated MAOP Segments Source Document Grading Profile Iterative Process Improvement Research & fill missing data gaps Improve document quality, if possible Update data sets with better data Re-run MAOP analysis & compare results vs. established MAOP Update GIS data Source Document Electronic Library

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Document Review Source document data posted to MaxOp TM cover sheet Unique ID assigned to each source document / folder / file Bar code creates a traceable link from the data back to the source document (scanned image)

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Quality Control Challenges Historical documentation – Stationing listed (if any) may not match current GIS standards – Unsure if the document is the most current for that segment Ex. HQ alignment sheets vs. field offices – Filing structure isn’t conducive to limiting research to Class 3 & 4 and HCA’s Organized by WO / AFE# Merging of GIS & Historical documentation – What is the source of the electronic data (GIS, risk,.xls, ILI, etc.)? – Historical takes precedence unless otherwise determined by operator (PHMSA ADB) – Terminology of documentation not matching GIS terminology Ex. line identification – Line #2 South TX Jct. vs. Route Code Expertise of Document Review & QC Personnel – Natural trade-off’s between quantity, speed, quality & cost – Steep learning curve, must be willing to invest in strong training & QC process – Document review can be tedious; must let those who have mastered this process to promote up to QC / other roles

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Discrepancy Resolution PHMSA ADB – Annual report due – Class 3 & 4 and HCAs in Class 1 & 2 (Annual Report NOPR?) Gaps in source documentation – Poor quality document grades Calculated MAOP < Established MAOP Are there newer or higher quality source documents elsewhere (“Complimentary Documents”)? Linear reference & stationing issues Non-linear (distribution system) replacement projects – Old source document replaced with new one

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Identify Potential MAOP Deficiencies

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Prioritize & Mitigate “Problem Segments” What is PHMSA’s next step after the 2013 annual report? – PHMSA Annual Report Revisions NOPR (4/13/2012) All transmission mileage validated (not just class 3&4 and class 1&2 HCA) Deadline March 15, 2013 (not July 3, 2013 per PHMSA reauthorization bill) – Industry Comments Hydrotest or other? – Anyone want to go in w/me to buy/build hydrotest company?!?! Schedule and priority? – Likely some risk-based approach

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. NOPR Annual Report Section Q

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. NOPR Annual Report Section R

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Sustainability Work / Asset Management Systems Link source documents to MAOP data – GIS (PODS, APDM, other) – MAOP Data Books (hard copy vs. electronic) Develop/improve MAOP procedures – Data capture – Data repository – Responsibilities Don’t want to repeat this effort!

PROFESSIONAL ENGINEERS. REGULATORY EXPERTS. TRUSTED PARTNERS. Questions? Chris Foley RCP Inc. Vice President (713)