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Appendix II

TransCanada Pipelines Limited and NEB-regulated Subsidiaries (TransCanada)

Integrity Management Program Audit Assessment

Table of Contents

Introduction:

TransCanada has three Integrity Management Programs (IMPs), which are:

  • Canadian Gas Pipeline Integrity Management Program (CND-GAS-IMP);
  • Canadian Liquid Integrity Management Program (CDN-LIQ-IMP); and
  • Plant Integrity Management Program (Plant IMP).

These IMPs are referred to throughout this Audit Evaluation Table as the Gas Pipeline IMP, Liquid Pipeline IMP, and Plant IMP, respectively.

The TransCanada subsidiaries included in this audit included specifically:

  • TransCanada PipeLines Limited;
  • TransCanada Keystone Pipeline GP Ltd.;
  • Trans Québec & Maritimes Pipeline Inc.;
  • Foothills Pipe Lines Ltd.; and
  • NOVA Gas Transmission Ltd.

Audit Objectives and Scope:

The scope of the audit included an assessment of whether TransCanada was fulfilling the requirements of:

  • the NEB Act;
  • the OPR-99;
  • CSA Z662-11, Oil and Gas Pipeline Systems; and
  • TransCanada’s policies, practices and procedures.

More specifically, the audit examined nine sub-elements of the NEB management system requirements as they relate to TransCanada’s integrity management programs. These sub-elements were selected using the Board’s risk-informed approach to focus the scope of the audit on areas that have previously been shown to have the highest rates of non-compliance among NEB-regulated companies and to expedite and focus the assessment of the IMP technical programs in light of the allegations.

1.0 Policy and Commitment

1.1 Policy and Commitment Statements

Expectations:

The Company shall have a policy approved and endorsed by senior management (the Policy). It should include goals and objectives and commit to improving the performance of the Company.

References:

OPR-99 section 4

CSA Z662-11, Clauses 3.1.2 and 3.2

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

2.0 Planning

2.1 Hazard Identification, Risk Assessment and Control[1]

Expectations:

The company shall be able to demonstrate a procedure to identify all possible hazards. The company shall assess the degree of risk associated with these hazards. The company should be able to support the rationale for including or excluding possible risks in regard to its environment, safety, integrity, crossings and awareness and emergency management and protection programs (management and protection programs). The company shall be able to implement control measures to minimize or eliminate the risk.

References:

OPR-99 sections 4(2), 39, 40 and 41

CSA Z662-11, Clauses 3.1.2(f), 3.2(a), 3.2(b), 10.5.1.1(d) and 16.2

Audit Assessment:

General

During interviews and in documents submitted, TransCanada stated that it has developed procedures to identify threats (hazards), assess the degree of risk associated with those threats, and implement control measures to mitigate or eliminate the risk of the threats. TransCanada explained that its Engineering and Asset Reliability (E&AR) department is accountable for managing the operational performance, cost and risks of TransCanada’s pipeline and facility assets. This includes developing and implementing asset strategies and integrity management systems to manage operating and maintenance risk. Within the E&AR department, subject matter experts in the Pipe Integrity and Facilities Integrity departments are responsible for developing Integrity Management Programs (IMPs). Pipe Integrity is grouped into threat-specific teams, and Facilities Integrity is grouped into equipment-specific teams. These teams are accountable for assessing risks and developing annual maintenance and assessment work plans.

Hazard Identification Process

Processes for threat[2] identification and risk assessment and control are documented in TransCanada’s three IMPs, which are:

  • Canadian Gas Pipeline Integrity Management Program (CND-GAS-IMP);
  • Canadian Liquid Integrity Management Program (CDN-LIQ-IMP); and
  • Plant Integrity Management Program (Plant IMP).
Threat Identification Process

TransCanada’s threat identification process is meant to verify conditions that may exist that would make a line segment susceptible to a threat. The determination of these conditions varies with each threat category. TransCanada considers threats according to the following:

  • Time Dependent
    • External corrosion
    • Internal corrosion
    • Environmental cracking (e.g. stress corrosion cracking)
  • Time Independent
    • Mechanical damage
    • Incorrect operations
    • Weather-related and outside forces
  • Static or Resident
    • Manufacturing related defects
    • Welding or fabrication related defects
    • Equipment failures

TransCanada’s process for threat identification was reviewed for all threats and, except where noted for the threat to high pressure station piping in gas facilities, was assessed to be compliant with the requirements. An example of one of the threat assessments for mechanical damage (dents) is provided to illustrate TransCanada’s process.

Individual Threat Assessment: Dents

TransCanada’s dent program is managed according to TEP-ILI-DEF-CDN Analysis of Deformation In-Line Inspection (ILI) Data for CDN Pipelines (EDMS No. 006980190) and TEP-ITM-Mechanical Damage Threat Management Program (TEP-ITM-MECH, EDMS No. 006786487). TransCanada uses data from the ILI program to characterize dents in its pipeline system and TransCanada continues to develop this technology with the tool vendors. The detection and characterization of geometric anomalies undergoes further processing to develop prioritized remediation activities in specific areas, based on previous excavation reports from other programs and in areas where dents have been previously mitigated. When dents are excavated, TransCanada applies the methodologies of CSA Z662-11, ASME B31.8 and its own modified B31.8 formula to determine which remediation or mitigation techniques may be applied. TransCanada considers the threat of mechanical damage from external sources as low, due to its Public Awareness Program and the Right of Way (ROW) patrols that it conducts. Additional measures are applied to areas determined to have a threat of mechanical damage that is higher than low (e.g., population density, history of damage, increased construction activity).

Pipelines

For pipelines, TransCanada has detailed nine potential threat categories that are considered during its threat identification process (Gas Pipeline IMP, Section 9.7, and Liquid Pipeline IMP, Section 3.1.2). The threat categories also include sub-threats derived from consideration of CSA Z662-11, Annex H, Clause H.2.6 and ASME B31.8S.

TransCanada’s Threat Management Programs for the nine threat categories referred to above are as follows:

  • Mechanical Damage Threat Management Program (TEP-ITM-MECH, EDMS No. 006786487);
  • External Corrosion Threat Management Program (CDN) (TEP-ITM-ECOR, EDMS No. 006570955);
  • Internal Corrosion Threat Management Program (TEP-ITM-IC, EDMS No. 006786402);
  • Stress Corrosion Cracking Threat Management Program (TEP-ITM-SCC-CDN, EDMS No. 005767613);
  • Equipment Failure Threat Management Program (TEP-ITM-EQUIP, EDMS No. 006786449);
  • Incorrect Operations Threat Management Program (TEP-ITM-IOPS, EDMS No. 006810297);
  • Construction and Manufacturing Threat Management Program (TEP-ITM-MANUF, EDMS No. 006786458);
  • Weather and Outside Forces Threat Management Program (TEP-ITM-WOF, EDMS No. 005767611); and
  • Facility Pipe Threat Management Program (CDN) (TEP-ITM-FPIPE-CDN, EDMS No. 007379193).

Section 9 of the Gas Pipeline IMP specifies how each threat management program has a consistent approach whereby threat identification is one step in an overall threat management process. Pipe segments susceptible to a threat are identified and the rationale for including or excluding threats is documented within each threat management program. Risk analyses are completed and the results of the analyses are used to prioritize and plan activities to reduce or eliminate the probability of failure, the consequences of failure, or both. Selected activities for the upcoming budget cycle are captured annually in TransCanada’s Pipeline Maintenance Plan. Results obtained from the execution of the Pipeline Maintenance Plan are assessed and used as additional inputs into the next planning cycle.

Facilities

The TransCanada Facility Group is divided into several areas of expertise, which include Mechanical, Field SCADA, Civil Engineering, Design Engineering Support, Measurement Engineering, Controls, and Electrical. As per Section 2.5.5 of the Plant IMP, new construction is completed in compliance with the applicable codes, which address the associated hazards and corresponding risks. In addition, many of the potential operating hazards are identified and mitigated during the early design stage through Hazard Identification Studies (HAZID) and Hazard and Operability Studies (HAZOP) analyses. With the Project Turnover Memorandum, residual risks are identified and documented for the facility integrity group. To address ongoing reliability, applicable existing plans are used, or new integrity plans are created, to maintain the equipment functionality so that the identified hazards, associated designs and codes are managed throughout the lifecycle of the equipment.

High Pressure Station Piping in Gas Facilities

TransCanada developed a new management program in December 2012 for high pressure piping in gas facilities (e.g., meter and compressor stations, valves sites). This is documented in the Facility Pipe Threat Management Program (TEP-ITM-FPIPE-CDN, EDMS No. 007379193). Before this new program was developed, the station piping was managed under TransCanada’s Integrity Management Process for Pipelines - Revision 2 process. The new program includes a documented process for identifying the hazard and assessing the risk of high pressure station piping. The new program was assessed as adequate in terms of its content, but it has not yet been fully implemented throughout TransCanada’s facilities. TransCanada indicated in its response to an Audit Information Request that "the risk assessment and selection of mitigation plans is planned for completion in November of 2013". Given that the new program has not yet been fully implemented, TransCanada is non-compliant with the requirements of this audit sub-element and with CSA Z662-11, Clauses 3.1.2(f) and 3.2.

Risk Assessment

TransCanada has implemented its Asset Management System (AMS) to manage its operating and maintenance risk. The risk management element of the AMS outlines a requirement for Operations and Engineering to develop and maintain a risk register to capture risk events for all assets that TransCanada operates. The Asset Management System & Governance (AMS&G) team oversees the development of the register, but inputs are collected from engineering, field operations, commercial operations, corporate health and safety, and compliance departments. Risks are calculated by aligning the probability of events and the potential magnitude of consequences. The risk register is currently entered and maintained within a Microsoft Access database and is controlled by the AMS&G team during its developmental stages to maintain integrity of the data. An assessment of the establishment and implementation of the risk assessment processes follows, based on facility categorizations.

Pipelines

Risk Assessment and Management methodologies are documented in Section 10 of the Gas Pipeline IMP and Section 4 of the Liquid Pipeline IMP. As noted previously under Threat Identification, the processes used to assess risk are threat-specific, and process details are provided in the Risk Assessment and Prioritization of TransCanada’s Integrity Threat Management Programs.

TransCanada’s risk assessment and risk management are achieved using either of the following two approaches:

  1. For pipelines where assessment or direct examination anomalies have been detected, or similar conditions are inferred, the specific anomalies are assessed, and control or mitigation activities are planned.
  2. For pipelines where assessment data has not been collected, risk assessment is performed by integrating information from various sources, including: subject matter expertise; applied learnings from other similar segments of pipe across the TransCanada system, including historical performance; the TransCanada risk algorithm Risk Assessment Using PRIME (TEP-INT-PRIME, EDMS No. 003972569), for External Corrosion and SCC threat; and, the tracking of leading indicators, such as an elevation in communication to stakeholders in response to a spike in the frequency of unauthorized encroachments on the ROW or relevant information from industry associations.

Where assessment data is available, a pre-screening is performed to look for urgent repair conditions. This is followed by a reliability based assessment to evaluate the probability of failure and account for measurement uncertainties. The technical details of the model are included in the document Risk Models for Corrosion Using ILI Data (TER-COR-RSK, EDMS No. 005767603). With the assessment data, near-term and future remediation is planned, and priority is assigned according to population density.   Additionally, ongoing safety is addressed through a temporary pressure restriction. The criteria for determining when a pressure restriction is required are outlined in Analysis of MFL In-Line Inspection for CDN Pipelines (CDN) (TEP-INT-ILI-CDN EDMS No. 006570876). The procedure for implementing the pressure restriction is outlined in the TOP Pipeline Restriction Procedure. Pressure control is addressed per the System Design & Commercial Operations Pipeline MAOP De-rate Procedure (EDMS No. 006837355).

When assessment data has not been collected, a risk assessment is performed by executing the TransCanada risk algorithm Risk Assessment Using PRIME (TEP-INT-PRIME, EDMS No. 003972569). Subject matter experts integrate the PRIME data results with other relevant information to prioritize the pipeline inspection schedules.

An example of risk assessment and management is provided for the Weather and Outside Forces (WOF) threat. This threat is managed according to the Weather and Outside Forces Threat Management Program (TEP-ITM-WOF, EDMS No. 005767611). The approach is to conduct a Phase 1 geotechnical study along all of the company pipeline assets. Areas of elevated concern are identified and then reviewed further with Phase 2 and Phase 3 studies. The collected information is used to determine the actual risk to the pipeline asset, and then mitigation, control or monitoring programs are planned, based on the results. TransCanada’s risk assessment and risk management process for the threat of WOF was assessed to be adequate.

Facilities

Integrity management of facilities at TransCanada comprises four risk-assessed components:

  1. Integrity Planning, including System Assessment, Facilities Assessment, and Integrity Programs;
  2. Project Integrity, including Project Risk Analysis, Business Value Analysis, and Project Ranking;
  3. Design Integrity, including Inter Disciplinary Design Check Meetings, and Reliability and Maintainability; and
  4. Maintenance Integrity, including Facility Criticality.

In managing the integrity of non-pipe facilities, TransCanada identified a number of potential integrity threats, including equipment failure, inability to operate as expected, obsolescence, and environmental and safety concerns. Consequences of facility threats and potential failures include public safety impact, loss of life, customer/business impact, regulatory impact, and environmental impact. Risk assessments are performed on the potential threats and consequences to identify potential impacts as well as corrective and preventive actions. When activities are required to manage the risk, the details on conducting these activities are then documented in TransCanada’s equipment-specific integrity plans. Each equipment-specific integrity plan is developed with input from the regions, equipment manufacturers, Issue and Incident Tracking (IIT), other operators, Pipeline System Operations, and the previous year’s integrity plans. The equipment-specific integrity plans reference the relevant TransCanada Operating Procedures (TOPs) that were developed to manage threats and mitigate risks to the reliable operation of facility equipment.

Specific equipment integrity plans that address the risk requirements have been written for many equipment types. Examples are provided in the following documents:

  • The Mainline Field SCADA Engineering Integrity Plan (EDMS No. 004782175) contains a section on Risk Assessment (Section 4), and identifies issues of concern, the resulting impact, and an action plan to address the issue. Additionally, Section 3 of the document contains the operating and maintenance strategy that includes planned, predictive and reactive maintenance.
  • The Pressure Vessels Integrity Plan (EDMS No. 003763099) contains a section on Risk Assessment (Section 4). Pressure vessel inspection is addressed and reference is made to the TOP Pressure Vessel External and Internal Inspection (EDMS No. 003694710).
Recent Threat Identification or Risk Assessments

Threat identification and risk assessment activities are aggregated annually as part of the pipeline and facilities maintenance program budget approval process. The Pipeline and Facilities Maintenance Programs (PMP) for 2013, which are the output of the aggregated threat identification risk assessment, were finalized in September 2012.

Records indicated that for pipelines and facilities, work is planned and risk assessments are conducted with consideration given to the consequences of safety, health, the environment and individual risk. Consequences are considered during prioritization of remediation, prevention, control and mitigation activities, and also in repair criteria.

For gas pipelines, mitigation and repair activities requiring excavation of pipeline assets are conducted under the TOP Excavation Procedure (EDMS No. 003672343). The procedure references consultation with a TransCanada Environmental Specialist, and requires all work to be performed in compliance with the Environmental Field Procedures Guide (EDMS No. 003671954).

For liquid pipelines, risk assessments take into consideration the consequences of a potential release. For example, potential consequences that are considered are oil releases into what TransCanada refers to as "highly sensitive receptors". These are defined by TransCanada as specific areas where a release from a pipeline could have significant consequences on public health, the environment or the economy.

For the risk associated with third party damage, TransCanada has pipeline class location and urban development programs to evaluate the issue relating to protecting the public and the pipeline as population growth encroaches on pipelines (Pipeline Crossing and Encroachment Procedure Canada TOP, (EDMS No. 003674617), Pipeline Right-Of-Way Procedures Canada TOP (EDMS No. 003672613), and TEP-INT-CLA Class Analysis and Remediation (CDN) (EDMS No. 005766974). TransCanada stated that its Public Awareness Program (TOP Pipeline Public Awareness Program Plan, EDMS No. 003860909) educates and increases awareness of pipeline safety.

Upon completion of a threat identification and risk assessment, the individual threat teams develop a threat-specific Pipeline Maintenance Plan (PMP). Asset-based program planners assemble the threat specific sections of the PMP into a single, asset specific, PMP. During audit interviews and through documents reviewed, the Board confirmed that threat identification for the liquid pipeline has been performed primarily by the liquid integrity team, with adequate support from the threat-specific subject matter experts as required.

Risk control measures are identified through several avenues, including the following:

  • The remediation and mitigation measures required to address specific defects are identified in the Threat Management Programs.
  • The Corrosion Prevention team is accountable for corrosion control through inspection, maintenance and remediation of the cathodic protection system.
  • TransCanada Operating Procedures (TOPs) are built, where applicable, to manage a particular threat or risk (e.g., the TOP Keystone Pressure Control Valve Vibration Evaluation Procedure (EDMS No. 006811833)).
  • TOPs are also developed to ensure that routine, consistent inspection and maintenance is performed (e.g., the TOP Relief Valve Inspection and Overhaul Program (EDMS No. 003694631) and the TOP Valve and Valve Operator Inspection and Servicing (EDMS No. 003849601)).
Low Strength Steel Pipe and Fittings

In 2008, the NEB became aware that certain steel pipe and fittings procured and installed on the Keystone Pipeline had the potential to exhibit lower that specified yield strengths. The NEB subsequently initiated an investigation. This investigation preceded the audit and is ongoing. The low yield issue was confirmed during the audit, and documents were reviewed and interviews conducted with TransCanada personnel related to the issue. However, as the issue continues to be under investigation by the NEB, resolution of the investigation and any required remedial actions will be determined outside of the audit.

Summary: Hazard Identification, Risk Assessment and Control

The Management System Audit Element 2.1, Hazard Identification, Risk Assessment and Control, requires a company to have a procedure to identify all possible hazards, to assess the degree of risk associated with these hazards, and to implement control measures to minimize or eliminate the risk.

TransCanada has implemented a system to identify and manage its operating and maintenance risk. Risks are calculated by incorporating the probability of events and the potential magnitude of the consequences. Records indicate that for pipelines and facilities, work is planned and risk-assessments are conducted with consideration given to safety, health, and the environment. TransCanada’s process for threat identification was reviewed for all threats and was assessed to be compliant with the requirements.

The audit identified only one area of non-compliance in the sub-element of hazard identification, risk assessment and gas control. TransCanada developed a new management program for high pressure piping in facilities. This new program has been assessed and is adequate in terms of its content, but has not yet been fully implemented throughout all of TransCanada’s facilities.

Management System Audit Sub-Element Finding: Based on the incomplete implementation of the required high pressure station piping program for its gas facilities, TransCanada is assessed to be non-compliant with the requirements of the OPR-99 and CSA Z662-11, and is therefore non-compliant with this audit sub-element.

Compliance Status:

Non-Compliant

2.2 Legal Requirements

Expectations:

The Company shall have a verifiable process for the identification and integration of legal requirements into its management and protection programs. The Company should have a documented procedure to identify and resolve non-compliances as they relate to legal requirements which includes updating the management and protection programs as required.

References:

OPR-99 sections 4, 6, 40 and 41(1)

CSA Z662-11, Clause 3.2

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

2.3 Goals, Objectives and Targets

Expectations:

The Company shall have goals, objectives and quantifiable targets relevant to the risks and hazards associated with the Company’s facilities and activities (i.e. construction, operations and maintenance). The objectives and targets should be measurable and consistent with the Policy and legal requirements and ideally include continual improvement and prevention initiatives, where appropriate.

References:

OPR-99 section 40

CSA Z662-11, Clauses 3.1.2(h)(ii) and 3.2

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

3.0 Implementation

3.1 Organizational Structure, Roles and Responsibilities

Expectations:

The company shall have an organizational structure that allows its management and protection programs to effectively function. The company shall have clear roles and responsibilities, which may include responsibilities for the implementation of the management and protection programs.

References:

OPR-99 sections 40, 47 and 48

CSA Z662-11, Clauses 3.1.1, 3.1.2(b) and 3.2

Audit Assessment:

General

During interviews and in documents submitted, TransCanada stated that it has an organizational structure that allows it’s Integrity Management Programs (IMPs) to function effectively and efficiently across its gas and liquids pipelines and facilities assets.

TransCanada stated that the employees (primarily engineers and technologists) managing its Canadian IMPs are primarily based in Calgary. Approximately 160 staff performs work related to the Gas and Liquid Pipeline IMPs and approximately 150 staff performs work related to the Plant IMP. In addition, approximately 80 integrity specialists are located in regional offices across the Canadian pipeline system. These individuals are complemented by Field Technicians who execute integrity related activities.

The hierarchy of authority for the IMPs within TransCanada extends from an Executive Vice President, to Vice President, to Director, to Manager, to Program Lead/Manager levels. Under the Vice President of Engineering and Asset Reliability, one Director is responsible for pipe integrity and another Director is responsible for facilities (plant) integrity. The authorities and associated responsibilities are detailed in the respective IMP documents, specifically:

  • Gas Pipeline IMP, Section 3 and Appendix A;
  • Liquid Pipeline IMP, Section 2 and Appendix A; and
  • Plant IMP, Section 2 and Appendix C.

The audit determined that, for the Gas and Liquid Pipeline IMPs, roles and responsibilities are defined and documented for the key positions. These two IMPs also describe the accountabilities and responsibilities of the relevant TransCanada organizational units, arranged by Threats. The roles and responsibilities for each organizational unit are further detailed in the TransCanada Engineering Procedures (TEPs) for each Threat, as follows:

  • IMP Management Review: TEP-INT-MREV Pipe Integrity Management Review Process;
  • External Corrosion: TEP-ITM-ECOR-CDN External Corrosion Threat Management Program;
  • Internal Corrosion: TEP-ITM-IC Internal Corrosion Threat Management Program;
  • Equipment Failure: TEP-ITM-EQUIP Equipment Failure Threat Management Program;
  • Incorrect Operations: TEP-ITM-IOPS Incorrect Operations Threat Management Program;
  • Manufacturing: TEP-ITM-MANUF-CDN Manufacturing, Fabrication and Construction Threat Management Program;
  • Mechanical Damage: TEP-ITM-MECH Mechanical Damage Threat Management Program;
  • Stress Corrosion Cracking: TEP-ITM-SCC-CDN Stress Corrosion Cracking Threat Management Program; and
  • Geotechnical: TEP-ITM-WOF Weather and Outside Forces (Geotechnical) Threat Management Process.

Based on documentation reviewed and interviews with personnel, TransCanada’s organizational structure, roles and responsibilities for the Gas and Liquid Pipeline IMPs are compliant with the requirements for this sub-element. The organizational structures relevant to these two IMPs are well defined, with adequate dedicated resources.

The audit determined that the roles and responsibilities for the Plant IMP are not as well defined. In Section 2.2 of the Plant IMP (Lines of Responsibility and Development of IMP/Risk Mitigation Process), only high level positions (e.g., Executive Vice President, Vice President, Director) are identified with respect to the Plant IMP. The functional key positions for the Plant IMP are not specified. The organizational chart in Appendix C of the Plant IMP is considerably less detailed than the organizational charts provided in Appendix A of both the Gas Pipeline IMP and the Liquid Pipeline IMP. 

During the audit, TransCanada was in the process of revising its Plant IMP. The Facility Integrity and Reliability Management Program (FIRM) (EDMS No. 007803540) were approved by TransCanada management in July 2013. Section 2.2 (Roles and Responsibilities) of the FIRM more explicitly details the functions and processes of the FIRM Program, departmental interactions and the organizational structure. The roles and responsibilities for pressure vessels, over-pressure protection, relief valves and tanks were referenced in the appropriate TEPs, TransCanada Engineering Specifications (TESs), TransCanada Operating Procedures (TOPs) and TransCanada Engineering Directives (TEDs). The FIRM references Section 6 of TransCanada’s Quality Assurance Manual (QMS) (EDMS No. 003722000) that identifies the roles and responsibilities for pressure vessels, heating boilers and ASME pressure relief vessels across the organization. TransCanada’s revised FIRM addresses the requirements of roles and responsibilities that were lacking in the Plant IMP.

In addition to the organizational structure related to TransCanada’s IMPs, the audit assessed the roles and responsibilities of integrity personnel as they relate to construction projects. This information was required because the IMPs are under the main organizational structure of Operations and Engineering (O&E), while construction activities are under the main organizational structure of Major Projects. In light of this separate organizational structure, the audit assessed whether sharing of information on integrity related issues, incidents and learnings identified is occurring. Sharing of information related to issues identified during the operational life of pipelines and facilities (by the IMP personnel) is important because it could require changes to the design and/or construction of future pipelines and facilities (by the Major Projects personnel). Conversely, sharing of information related to issues identified during construction is important because it could have an impact on the subsequent IMPs for both pipelines and facilities.

During audit interviews, TransCanada explained how its Capital Projects Management System requires that functional engagement and support between O&E and Major Projects occur, and that the O&E Functional Engagement and Support document describes the engagement accountabilities for the Project Manager, Project Engineering Manager and the Integration Manager. The documents and records examined confirmed adequate communication between the O&E integrity personnel and Major Projects personnel.

Summary: Organizational Structure, Roles and Responsibilities

The Management System Audit Element 3.1, Organizational Structure, Roles and Responsibilities, requires a company to have an organizational structure that allows its management and protection programs to effectively function. It also requires companies to have clear roles and responsibilities, which may include responsibilities for the implementation of these programs.

TransCanada has approximately 310 employees performing work related to its integrity management programs across its Canadian pipeline system. This is complemented by approximately 80 field technicians who execute integrity-related activities.

The audit determined that for gas and liquid pipeline IMPs, roles and responsibilities are well-defined and have adequate, dedicated resources. The audit also assessed TransCanada’s revised plant IMP, now known as the Facility, Integrity and Reliability Management Program (FIRM), and found that it addresses the roles and responsibilities that were lacking in the previous version.

Management System Audit Sub-Element Finding: Based on documents reviewed and interviews with personnel, TransCanada was able to demonstrate that it was in compliance with the requirements of the OPR-99 and CSA Z662-11, and is therefore compliant with the requirements of this audit sub-element.

Compliance Status:

Compliant

3.2 Management of Change

Expectations:

The Company shall have a management of change program. The program should include:

  • identification of changes that could affect the management and protection programs;
  • documentation of the changes; and
  • analysis of implications and effects of the changes, including introduction of new risks or hazards or legal requirements.

References:

OPR-99 section 6

CSA Z662-11, Clause 3.1.2(g)

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

3.3 Training, Competence and Evaluation

Expectations:

The company shall have a documented training program for employees and contractors related to the company’s management and protection programs. The company shall inform visitors to company maintenance sites of the practices and procedures to be followed. Training requirements should include information about program-specific policies. Training should include emergency preparedness and environmental response requirements as well as the potential consequences of not following the requirements. The company shall determine the required levels of competency for employees and contractors. Training shall evaluate competency to ensure desired knowledge requirements have been met. Training programs should include record management procedures. The training program should include methods to ensure staff remains current in their required training. The program should include requirements and standards for addressing any identified non-compliances to the training requirement.

References:

OPR-99 sections 4, 18, 29 and 46

CSA Z662-11, Clauses 3.1.2(c), 3.2 and 10.2.1

Audit Assessment:

General

During interviews and in documents submitted, TransCanada stated that it has a documented training program for employees and internal contractors related to its Integrity Management Programs (IMPs). TransCanada indicated that training requirements for external contractors are specified within its service contracts that are verified through inspections and supervision by TransCanada personnel.

TransCanada uses the following methods to manage the training and qualification of employees, and in some instances internal contractors:

  • Learning Management System (LMS);
  • Active Management;
  • Practice of Engineering (POE); and
  • Performance Management Process.
Learning Management System

The LMS is a web-based tool used to manage the training and competency evaluation for TransCanada employees and internal contractors. LMS is also used to document the results of technical tasks evaluated through three competency evaluation methods (Manager Review, Discuss and Describe, and Jobsite Observation), which are discussed below. Any worker who has not been deemed competent or qualified for a particular task is prohibited from independently performing that task.

Field Role Technical Competency

In 2011, TransCanada introduced its Field Role Task Evaluation Project to improve the quality of the learning, development and competency evaluation programs related to field-based work. The competency evaluation method and training requirements for field technical tasks utilizes a model developed by the Canadian Gas Association and has been adapted for TransCanada’s use. For field role evaluations, interviews or jobsite task observations or simulations are required to demonstrate competency. TransCanada uses three methods of competency evaluation:

  • Manager Review - Applies to low risk level task evaluations. Under this method of evaluation, the manager, in consultation with a Qualified Technician, will approve task competency of the employee.
  • Discuss and Describe - Applies to medium risk level task evaluations. Under this method of evaluation, the manager will approve task competency of an employee based on a successful interview evaluation conducted by a qualified evaluator.
  • Jobsite Observation - Applies to high risk level task evaluations. Under this method of evaluation, the manager will approve task competency of the employee based on successful jobsite task simulation or performance in the presence of a qualified evaluator.
Active Management

TransCanada’s leadership is responsible for ensuring that its employees and internal contractors are properly trained and competent to perform their assigned tasks. Managers complete this by actively assigning and monitoring work, providing feedback and reviewing staff competency on an ongoing basis.

Practice of Engineering

TransCanada’s POE specification, TES-ENG-POE (EDMS No. 003672108), defines the required professional member jurisdictional registration for engineering staff and defines scope of practice. APEGA (Association of Professional Engineers and Geoscientists of Alberta) registration is a hiring requirement for engineering positions located in Alberta. The POE specifies qualifications for Engineer-in-Charge, Responsible Engineers and design discipline checkers. The Engineer-in-Charge is accountable for ensuring that personnel carrying out engineering work are qualified and competent to do so for the jurisdiction in which the engineering and construction are occurring.

Performance Management Process

During the audit interviews and document review, TransCanada stated that it monitors and manages employee development and training through its Performance Management Process (PMP), which is used to establish annual performance expectations and document the development and training plan of each employee. The PMP identifies employee development requirements, including training. Adjustments are made to an employee’s development plan to meet evolving job requirements, as required. Performance management, specifically related to pipe integrity, is documented in TEP-INT-COMP Pipe Integrity Hiring, Training and Competency Evaluation Procedure (EDMS No. 007379172), that outlines the methodology used to identify and communicate training requirements and evaluation of competency. Records of training and competency, which were reviewed during the audit, are provided in Element 4.1 Inspection, Measurement and Monitoring, as they applied to TransCanada’s programs.

Summary: Training, Competence and Evaluation

The Management System Audit Element 3.3, Training, Competence and Evaluation, requires a company to have a documented training program for employees and contractors related to the company’s management and protection programs. Training program should include program-specific policies, emergency preparedness, environmental response and information on the potential consequences of not responding appropriately. Training must also evaluate the competency to ensure knowledge requirements have been met.

Based on documents and records reviewed, the audit determined that TransCanada has developed effective methods to manage the training and qualification of its employees and contractors as follows:

  • Learning Management System (LMS), a web-based tool to document competency evaluation methods and track whether employees and contractors have been deemed qualified for a particular task;
  • Active Management, a leadership tool to actively assign and monitor work, provide feedback, and provide ongoing review of staff competency;
  • Practice of Engineering (POE), which defines the required professional registration for engineering staff, defines scope of practice and specifies qualifications for the Engineer-in-Charge; and
  • Performance Management Process, used to establish annual performance expectations and document the development and training plan of each employee.

Management System Audit Sub-Element Finding: Based on documents reviewed and interviews with personnel, TransCanada was able to demonstrate that it was in compliance with the requirements of the OPR-99 and CSA Z662-11, and is therefore compliant with the requirements of this audit sub-element.

Compliance Status:

Compliant

3.4 Communication

Expectations:

The Company shall have an adequate, effective and documented communication process(es):

  • to inform all persons associated with the Company’s facilities and activities (interested persons) of its management and protection programs policies, goals, objectives and commitments;
  • to inform and consult with interested persons about issues associated with its operations;
  • to address communication from external stakeholders;
  • for communicating the legal and other related requirements pertaining to the management and protection programs to interested persons;
  • to communicate the program’s roles and responsibilities to interested persons.

References:

OPR-99 sections 4, 18, 28, 29, 40, 47 and 48

CSA Z662-11 Clauses 3.1.2(d) and 3.2

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

3.5 Documentation and Document Control

Expectations:

The Company shall have documentation to describe the elements of its management and protection programs - where warranted. The documentation should be reviewed and revised at regular and planned intervals. Documents should be revised immediately where changes are required as a result of legal requirements or where failure to make immediate changes may result in negative consequences. The Company should have procedures within its management and protection programs to control documentation and data as it relates to the risks identified in element 2.0.

References:

OPR-99 sections 4, 27, 47 and 48

CSA Z662-11, Clauses 3.1.2(e)(f), 3.2 and 10.5.1.1(d)

Audit Assessment:

This Management System sub-element was not formally assessed during the Integrity Management Program audit.

Compliance Status:

Not Assessed

3.6 Operational Control-Normal Operations

Expectations:

The company shall establish and maintain a process to develop, implement and communicate mitigative, preventive and protective measures to address the risks and hazards identified in elements 2.0 and 3.0. The process shall include measures to reduce or eliminate risks and hazards at their source.

References:

OPR-99 sections 4, 27, 36, 37, 39 and 40

CSA Z662-11, Clause 3.1.2(f), 3.2 and 10

Audit Assessment:

General

During interviews and in documents submitted, TransCanada stated that it establishes and maintains processes to develop, implement and communicate surveillance and condition monitoring, and preventive, protective, mitigative, and remedial measures to address identified risks and threats.

Once TransCanada has completed its risk analysis and threat identification, integrity actions are selected to control and manage identified and potential threats. The selected actions are documented in TransCanada’s annual Pipe and Facility Maintenance Plans (Maintenance Plans). Following implementation of the Maintenance Plans, the results are analyzed as part of TransCanada’s improvement cycle. The audit confirmed that the processes for the development of the Maintenance Plans are documented in TransCanada’s Integrity Management Programs (IMPs). The relevant sections of the IMPs are:

  • Gas Pipeline IMP, Sections 11 and 12;
  • Liquid Pipeline IMP, Sections 6 and 9; and
  • Plant IMP, Sections 4 and 5.

TransCanada’s Pipe Integrity Threat Management Programs (Threat Management Programs) provide a listing of appropriate integrity measures employed for managing specific types of threats. The Threat Management Programs are as follows:

  • Mechanical Damage Threat Management Program (TEP-ITM-MECH, EDMS No. 006786487);
  • External Corrosion Threat Management Program (CDN) (TEP-ITM-ECOR, EDMS No. 006570955);
  • Internal Corrosion Threat Management Program (TEP-ITM-IC, EDMS No. 006786402);
  • Stress Corrosion Cracking Threat Management Program (TEP-ITM-SCC-CDN, EDMS No. 005767613);
  • Equipment Failure Threat Management Program (TEP-ITM-EQUIP, EDMS No. 006786449);
  • Incorrect Operations Threat Management Program (TEP-ITM-IOPS, EDMS No. 006810297);
  • Construction and Manufacturing Threat Management Program (TEP-ITM-MANUF, EDMS No. 006786458);
  • Weather and Outside Forces Management Program (TEP-ITM-WOF, EDMS No. 005767611); and
  • Facility Pipe Threat Management Program (CDN) (TEP-ITM-FPIPE-CDN, EDMS No. 007379193).

The reviewed threat control and risk reduction activities employed by TransCanada can be divided into the following five categories (discussed in more detail below): surveillance and condition monitoring; proactive measures; preventive measures; mitigative measures; and remedial measures. These threat control and risk reduction activities are addressed within the Gas Pipeline IMP, Liquid Pipeline IMP, and the Plant IMP, as well as within the individual Threat Management Programs.

Surveillance and Condition Monitoring

Surveillance and condition monitoring is used to detect the presence of threats and monitor threat progression. TransCanada’s activities associated with surveillance and condition monitoring include:

  • Pipeline patrols (TOP Pipeline Right of Way Procedures Canada (EDMS No. 003672613), TOP Aerial Pipeline Patrol (EDMS No. 003672387) and Pipeline Ground Based Patrols (EDMS No. 003875137));
  • Leak detection surveys (Natural Gas Leak Detection Procedure Canada (EDMS No. 003676669));
  • Cathodic protection surveys (TEP-CP-PRGM Corrosion Prevention Program (EDMS No. 006786483) and TES-CP-SS Cathodic Protection Survey Specification (EDMS No. 003670956));
  • Geotechnical and water crossing surveys (Phase I Geologic Hazards Assessment Canadian Portion of the Keystone Oil Pipeline Alberta, Saskatchewan, Manitoba, Canada (103-93179), TEP-ITM-WOF Weather and Outside Forces Management Program (EDMS No. 007773954) and TOP Pipeline Underwater Inspections (EDMS No. 003671756)); and
  • Various types of facilities and equipment inspections, with some examples of these being the TransCanada Engineering Procedures (TEP) or TransCanada Operating Procedures (TOP) as follows: TEP-ITM-FPIPE-CDN Facilities Piping Integrity Management Program (EDMS No. 007379193), TEP-ITM-EQUIP Equipment Failure Threat Management Program (EDMS No. 006786449), TOP Critical Gas Pressure Regulator Inspection and Maintenance (DEMS No. 007585439), TOP Valve and Valve Operator Inspection and Servicing (EDMS No. 003849601), TOP Control Valve Inspection Canada and Mexico (EDMS No. 003832589) and TOP Pipeline Pressure Relief Valve Blow Off Valve Inspection (EDMS No. 003866831).
Preventive Measures

Preventive measures are intended to eliminate or prevent the presence of a threat and may include improved manufacturing and construction practices, improved material selection, increased security, public awareness activities and signage. The Board reviewed several TransCanada Operating Procedures (TOPs) that describe and direct TransCanada’s Public Awareness Program (PAP). TransCanada’s PAP is intended to eliminate or reduce potential third-party damage through communications with the public, excavators and contractors, emergency officials and local public officials. The Public Awareness Program is documented in the TOP Pipeline Public Awareness Program Plan (EDMS No. 003860909). The TOP One Call and Locating and Marking Procedures Canada (EDMS No. 003671859) details the necessary steps to complete prior to undertaking activities such as any ground disturbance, heavy equipment travel, excavating, blasting, or construction within 30 meters of facilities. The TOP TransCanada Signage Procedure (EDMS No. 003676680) provides information on sign types, sizes, content and posting areas, depending on the intent of the sign. While documents were received with respect to TransCanada’s PAP, it was not assessed in detail in this IMP audit.

Protective Measures

Physical protective measures are intended to guard the pipeline and facilities equipment against damage and failure. Coatings are an example of protective measures, as they are intended to separate the pipe from sources of corrosion. The consensus in industry is that corrosion prevention is most effective when a high integrity coating is used in conjunction with cathodic protection. The Board reviewed TransCanada’s Corrosion Prevention Program (TEP-CP-PRGM, EDMS No. 006786483, TES-CP-CR Cathodic Protection Criteria Specification EDMS No. 00378793, and TES-CP-SS Cathodic Protection Survey Specification EDMS No. 003670956) detailing the characteristics of its program to mitigate corrosion on protected structures using cathodic protection and assessed it to be adequate.

Mitigative Measures

Mitigation methods are intended to reduce failure probability or failure consequences, and include methods such as pressure reduction, pipe material upgrades, slabbing over pipelines, increased backfill, equipment upgrades, pipeline rerouting, corrosion inhibitor injection, secondary containment and pig cleaning runs. The methods considered for risk reduction and threat control depend on the threat type. During the audit, the Board noted that TransCanada’s IMPs, as well as the Threat Management Programs, included adequate mitigative options to address potential threats and risks. For example, preventive and mitigative measures are detailed in Section 9 of the Liquid Pipeline IMP. 

Remedial Measures

Remediation is completed to correct known issues, such as pipeline defects and excessive stresses due to geotechnical concerns (e.g. ground movement). Data inputs, such as defect assessments, hydrostatic testing, monitoring measurements, and indirect examination results are analyzed to identify areas requiring further investigation and/or repairs. During the audit, the Board noted that TransCanada’s Threat Management Programs and IMPs reference specific procedures for gathering additional data, analyzing monitoring and assessment results, and assessed them as being adequate. 

The audit examined examples of TransCanada’s procedures for analyzing in-line inspection results, where imperfections are evaluated to determine threats to the integrity of the pipeline. Special consideration is given to features such as dents, girth welds or seam welds that might be associated with other conditions. The following TransCanada procedures detail the approaches to analyze in-line inspection results:

  • Analysis of Deformation In-Line Inspection Data for Canadian Pipelines (TEP-ILI-DEF-CDN, EDMS No. 006980190);
  • Analysis of EMAT Crack Detection In-Line Inspection Data for Gas Pipelines (TEP-ILI-EMAT, EDMS No. 006980178);
  • Analysis of Hard Spots in In-Line Inspection Data (TEP-ILI-HS, EDMS No. 006980212); and
  • Analysis of In-Line Inspection Data (TEP-INT-ILI-CDN, EDMS No. 006570876).

Activities such as direct evaluation and hydrostatic testing may be required to further characterize suspected and identified features. Methods of defect repair include recoating, pipe cut-outs and strain reliefs, as well as installation of sleeves, composite reinforcement wraps and clamps. Assessments and anticipated remedial measures are then included in TransCanada’s Maintenance Plans.

Defect Assessment and Repair Procedures

For investigation of known or suspected features, non-destructive testing methods may be used, and might require pipeline exposure. A temporary reduction in operating pressure or other safety measures may be implemented to ensure that safety is maintained. Analysis of the data gathered in consideration of the design, material, construction, operating and maintenance history and expected operating conditions of the pipeline determines appropriate remediation and repair methods necessary to return the pipeline to full service. During the audit, the Board reviewed TransCanada’s procedures that are relevant to these activities:

  • TOP Pipeline Restriction Procedure (EDMS No. 003820831);
  • TOP Pipeline Defect Assessment and Repair Procedures (EDMS No. 003674615);
  • TOP Maximum Pressure for Pipelines With Known or Suspected Integrity Concerns (EDMS No. 003671945); and
  • Assessment of Features in Pipelines (TEP-INT-FASS, EDMS No. 004214235).

The Board also reviewed records of TransCanada’s voluntary pressure restrictions that were in place during pipe exposure, defect assessment and repair and noted that TransCanada had followed its required procedures.

Hydrotest Procedures for Defect Testing

Pressure testing is a method that produces a pass/fail result for defects contained in the pipeline test segment. Defects detected through pressure test failures are remediated by removal/replacement of the affected pipe segment. Hydrostatic Test Specification for Integrity Testing of Existing Pipelines (TES-HYDRO-HT4, EDMS No. 003697288) describes the procedure for pressure testing an existing pipeline to validate its suitability for continued operation at a previously qualified maximum operating pressure. During the audit, the Board reviewed TransCanada’s hydrotest procedure and assessed it as being adequate.

Approving, Documenting and Communicating the Maintenance Plans

Maintenance Plans for the remedial activities described previously are presented to TransCanada management for review and approval. For Pipe Integrity, information on the Maintenance Plan is communicated as per Pipe Integrity Communication Procedure (TEP-INT-COMM, EDMS No. 006980248). The Vice President of Engineering and Asset Reliability approves the Maintenance Plans for Pipe Integrity and Facilities Integrity. Preventive maintenance work is communicated, documented and tracked in Avantis, which is a maintenance management system that is used by TransCanada.

Maintenance Plan Implementation

Maintenance Plans are implemented by int