1. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Joint Direct Assessment Workshop High Impact Program Pipeline Research Council International, Inc. Nov 4 th, 2003

2. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003  Safety of the Public, Employees and the Environment  Reliability for Customers and Suppliers  Cost Minimization While Maintaining Safety and Reliability Why Technology? Safety ReliabilityCost CONSUMER NEED INTEGRITY MANAGEMENT RISK MANAGEMENT Technology Value Technology Value Operational Excellence

3. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Membership  Over Thirty three oil and gas pipeline companies and, organizations  El Paso, SoCal Gas, TransCanada Pipelines, Gas de France, GTI, Chevron-Texaco Pipeline, Chevron Texaco, SaudiAramco, Centerpoint Energy Gas Transmission, TransGas Ltd, Gastransport Services (GASUNIE), Foothills Pipeline, Gassco AS (Statoil), ENRON Transport Services, Panhandle Energy, Williams Gas Pipeline, Gulf South Pipeline, TEPPCO, Enbridge Pipelines, BP, National Fuel Gas Supply, Transco (UK), Dominion Transmission, Duke Energy, AOPL (12 members), Marathon Ashland Pipeline, Buckeye Pipeline, Shell Pipeline, ExxonMobil Pipeline, Colonial Pipeline, Southern Natural Gas Pipeline, GASUM OY, Consumers Energy, Explorer Pipeline, Columbia Gulf Transmission, ConocoPhillips,

4. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Program Magnitude  Subscriptionsapproximately$5.0 million  FERC Collection(2004 is last year)$7.3 million  Cash Co-funding (Members & Federal)$3.5 million  In-kind co-funding (not well captured)$5.0 million  Total activity for 2003> $20 million

5. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 PRCI Committees Compressor and Pump Stations Flexibility, Life Extension & Reliability, Designs to Maintain Compliance Corrosion and Inspection ILI for Mechanical Damage, Cracks, & Geometry, Direct Assessment, Coatings & Inspection Tools, SCC, MIC Design Construction and Operations Integrity Management, Reliability Based Design, Preventing 3 rd Party Damage, Human Factors, Abnormal External Loads, Wrinkles/Wriples Materials Faster Joining, New X100 Steels, Repair & Assessment Tools, Measurement Reliability and Accuracy, Wet Gas Solutions, Underground Storage Cavern Safety, Productivity, & Deliverability

6. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Congress Demands Integrity & Reliability Technology is the Foundation  Dec 17/02 Pipeline Safety Act – Clock’s Already Started –Update Regulations & Incorporate ANSI Performance Standards  ASME B31Q : Operator Qualification Standard underway  ASME B31.8S 2001: Managing System Integrity of Gas Pipelines –Language Supported by >20 technical reports  Direct Assessment: Support @ > $2.5M over three years –NACE RP0502-2002 External Corrosion DA Standard & Validations –Internal Corrosion Standards & Validations for Dry & Wet Gases –Inspection Tool Validations: CIS, DCVG, NoPig, etc –SCC Standards & Validations  Inline Inspection Standards –expected soon –API 1163 – ILI Systems Qualification Standard – Umbrella for Systems, –ASNDT ILI-PQ-2003 – for People who provide the Analyses, –NACE RP0102 -2002 Standard Recommended Practice ILI Operations

7. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Summary of Incident Causes

8. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Expanding the Tool Box for System Integrity Data Integration is key to Managing Integrity –Overlay Historical Knowledge, Recent Inspections with Digs –Initiated Standardized Definitions and Suggested Relationships Demonstrated in PODS, becoming an ANSI Standard  Direct Assessment –Providing Methodologies for External, Internal, CDA, and SCC –Improved, Alternatives and Innovative Inspections –Understanding Limitations, and –Improving Confidence through Validations  Prevention of Mechanical Damage –Best Practices – aim to support ASME B31P –Innovations to Develop Methods and Tools

9. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Expanding & Applying Technology Solution = Identify + Understand + Control/Prevent  Integrity Must Address all 25 Threats in Seven Groups: –Time Dependent, Stable, & Time Independent  Hydro Test“Intended” Failure Confirms Integrity  PiggingWhich Threats; What Technology; How Often  Direct Assessment Knowing Where to Dig & Why & How Often

10. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 2003 & 2004 PRCI High Impact NonPiggable Program  DA ValidationsPRCICoFundInKind –ECDA +CDA$968K$390K est $1,000K –ICDA$223K$250K est $ 750K  Developing Standards & Methodologies –SCCDA$50Kest $250K –ICDA wet$50Kest $250K  Understanding Inspection Tools and Assessment Methodologies –Integrity Protocol$97K –D A Protocols$98K  Magnitude$1,486K$640K$2,250K

11. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 2003 & 2004 PRCI DA High Impact Program  Non Piggable ToolsPRCICoFunding est InKind –NoPig$235K@ $390K$360K –Guided Wave 1$200Kest$125K$250K –LongRange UT$150Kest$150K$200K –Magnetic Telescope$185Kest$185K –Fluidized Sensors$150Kest$600K (DOE) –Sensors for Crawlers$150K $273K$352K –Magnitude$1,170K $1,723K$1,162K –Total @ $8.5M $2,656K est$2,363K est$3,412K

12. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 New DA Inspection Tool Development Specific Tools to consider for DOE/DOT Research Funding:  Corrosion Mapper (MEIS) ($400K –possibly DOT)  Transwave (EUPEC RMS) ($50K – in ECDA field trials)  NoPig ( additional 2004 Trials possibly )  Magnetic Telescope ($900K possibly DOE)  Long Range Ultrasonic Testing ($300K DOT cofunded)  Fluidized Sensors ($750K – 80% DOE)  Multi-service Tool - DA Meter in field test trials  Innovation or “Outside the Box”

13. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 MEIS – Magnetic Electrochemical Impedance Spectroscopy Coating Disbondment & Corrosion Mapper  Need to find commercialization partner –SoCal and NGA own intellectual property  Possible partners are NoPig or Dynalog  NoPig (service provider) –Currently makes one of two measurements Calibration step Need to add measurement to ground –Very interested in MEIS Want to commercialize metal loss first Concerned about infringements of MEIS on internal IP  Dynalog (equipment manufacturer) –Maker of C-SCAN –Have capability to make multi-frequency magnetometer measurements

14. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 EUPEC RMS (formerly Transwave)  Transwave now EUPEC - Remote Monitoring Systems (RMS) –Survey System ATIS Equipment redesigned to be more reliable  Technique similar to GRI developed waveform analyzer –Waveform analyzer places specific waveform on pipeline –ATIS uses natural harmonics of 60Hz from impressed CP  Evaluating ATIS system in ECDA tests –CIS type test - El Paso test near Cleveland, TX –Stray current test - Enbridge test in Toronto  No need for DA development at this time –EUPEC RMS interested in Real Time Monitoring development –Directed toward Mechanical Damage Prevention

15. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 NoPig  Completed first NA field tests – mid July ’03  DOT cofunding contracted @ $390K  Covered in DOT Presentation

16. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Magnetic Telescope –Currently addressing deficiencies identified in previous DOE rejection –Plan to seek DOE funds in next solicitation –Proposal seeks $900K over 2-3 years DOE cofunding needed NGA cofunding possible PRCI cofunding ~ $100K-$200K

17. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Long Range Ultrasonic Testing –Proposal - Look for SCC either side of the bell hole –Projects are underway with DOT cofunding.

18. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Fluidized Sensors –SwRI proposal Nano-particles in pipeline to seek humidity –DOE interested Want to see task addressing particle size –Concerned particle size too large –May drop out and settle on bottom of pipe –March ’03 Cost @ $640K over 2 years $200K PRCI share

19. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Integrated Multi-Service Tool –Tool to perform some combination of: Close Interval Survey Current Mapper (PCM/CSCAN) DCVG/ACVG Soil Resistivity –Northeast Gas Association has lead in this area

20. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Protocol Development Work has started on two protocols to guide the committee members in developing individual company standard operating procedures to meet ASME B31.8S, NACE RP0502 & Expected Reg: Overall Integrity Management Protocol –Kiefner & Associates External Corrosion Direct Assessment Protocol –Corrpro lead for transmission –Alternatives in AGA/GTI, NGA plus PG&E

21. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 In Summary PRCI Technology is Key to Operational Excellence  Improves the Means to Identify, Understand, and Control Threats  Enables the Flexible Development and Application of the Best Solution for Each Problem in the Operating Environment in Which it Occurs  Drives More Productive, More Responsive, and More Reliable Operations  Returns Investment Value: Value = Improvement and Innovation  Is the Critical Building Block of Sound, Thorough Risk Management – The Foundation of Integrity Management and a Key Component of Operational Excellence

22. OPS Workshop on Direct Assessment Houston, Nov 4, 2003 OPS Workshop on Direct Assessment Houston, Nov 4, 2003 Contact Details Keith Leewis 703/387-0190 X103 KLeewis@PRCI.org Pipeline Research Council International Inc. 1401 Wilson Blvd., Suite 1101 Arlington VA 22209