Sunoco 2013 Annual Report Download - page 31

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ITEM 3. LEGAL PROCEEDINGS
There are certain legal and administrative proceedings arising prior to the February 2002 initial public offering ("IPO")
pending against our Sunoco-affiliated predecessors and us (as successor to certain liabilities of those predecessors). Although
the ultimate outcome of these proceedings cannot be ascertained at this time, it is reasonably possible that some of them may be
resolved unfavorably. Sunoco has agreed to indemnify us for 100 percent of all losses from environmental liabilities related to
the transferred assets arising prior to, and asserted within 21 years of February 8, 2002. There is no monetary cap on this
indemnification from Sunoco. Sunoco's share of liability for claims asserted thereafter will decrease by 10 percent each year
through the thirtieth year following the February 8, 2002 date. Any remediation liabilities not covered by this indemnity will be
our responsibility. In addition, Sunoco is obligated to indemnify us under certain other agreements executed after the IPO.
Additionally, we have received notices of violations and potential fines under various federal, state and local provisions
relating to the discharge of materials into the environment or protection of the environment. While we believe that even if any
one or more of the environmental proceedings listed below were decided against us, it would not be material to our financial
position, results of operations or cash flows, we are required to report environmental proceedings if we reasonably believe that
such proceedings will result in monetary sanctions in excess of $0.1 million.
In January 2012, the Partnership experienced a release on its refined products pipeline in Wellington, Ohio. In connection
with this release, the Pipeline Hazardous Material Safety Administration ("PHMSA") issued a Corrective Action Order under
which the Partnership is obligated to follow specific requirements in the investigation of the release and the repair and
reactivation of the pipeline. The Partnership also entered into an Order on Consent with the Environmental Protection Agency
("EPA") regarding the environmental remediation of the release site. All requirements of the Order of Consent with the EPA
have been fulfilled and the Order has been satisfied and closed. The Partnership has also received a "No Further Action"
approval from the Ohio EPA for all soil and groundwater remediation requirements. The Partnership has not received any
proposed penalties associated with this release and continues to cooperate with both PHMSA and the EPA to complete the
investigation of the incident and repair of the pipeline.
In 2012, the EPA issued a proposed consent agreement related to the releases that occurred at the Partnership's pump
station/tank farm in Barbers Hill, Texas and pump station/tank farm located in Cromwell, Oklahoma in 2010 and 2011,
respectively. These matters were referred to the U.S. Department of Justice ("DOJ") by the EPA. In November 2012, the
Partnership received an initial assessment of $1.4 million associated with these releases. The Partnership is in discussions with
the EPA and the DOJ on this matter and hopes to resolve the issue during 2014.
The Partnership's Sunoco Pipeline L.P. subsidiary ("Sunoco Pipeline") operates the West Texas Gulf Pipeline on behalf of
West Texas Gulf Pipe Line Company and its shareholders, pursuant to an Operating Agreement. Sunoco Pipeline also has as
60.3 percent ownership interest in the company. In March 2010, Sunoco Pipeline received a Notice of Probable Violation,
Proposed Civil Penalty and proposed Compliance Order from PHMSA with proposed civil penalties in connection with a crude
oil release that occurred at the Colorado City, Texas station on the West Texas Gulf Pipeline in June 2009. PHMSA issued a
final order in August 2012, finding the Partnership in violation of all items identified in the original notice. The Partnership
paid $0.4 million during the third quarter 2012, but requested a petition for reconsideration on certain of the violations. A
settlement on the remaining violations was reached and the Partnership paid less than $0.1 million during the first quarter 2013.
In September 2013, the Pennsylvania Department of Environmental Protection ("PADEP") issued a Notice of Violation
and proposed penalties in excess of $0.1 million based on alleged violations of various safety regulations relating to the
November 2008 products release by Sunoco Pipeline in Murrysville, Pennsylvania. The Partnership is currently in discussions
with the PADEP. The timing or outcome of this matter cannot be reasonably determined at this time. However, the Partnership
does not expect there to be a material impact to its results of operations, cash flows or financial position.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.