Exhibit No. ATC-273
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`Exzonbiobil Pipeline Comaany M. P. (Mika) Tuclor Page 1of4
`800 Bt Suwel Prasident
`Hougicn, Teos 77002
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`Exgoniobil
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`Pipeline
`April B, 2004
`o
`Mr. D. Wight
`Alyeska Pipeline Service Company
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`Re: TAPS Pipeline Strategic Reconfiguration - Owners Oversight Process
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`Attached is a copy of the Owner Oversight Process recently approved by the TAPS
`Owners to provide oversight of the TAPS Pipeline Strategic Reconfiguration Project for the
`Owners. The first group to be created is the Technical Oversight Group (the "TOG").
`ExxonMokil Pipeline Company appeints Khalil Hobeiche (713-656-4463,
`khalil.j.hobeiche @ exxonmobil.com) as its representative to the TOG, and by copy of this
`letter, we request that the other TAPS Owners name their appointments. In addition, we
`request that the Project Manager coordinate a kick-off meating for this group.
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`We appreciate the effort by Alyeska, the Project Management Team and EPCM cantractor
`on the project to date, and we're excited aboul the opportunity to work together for a
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`successiul project implemeantation.
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`MPT owh
`Attachment
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`¢ - wiattachment
`TAPS Owners
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`Diocked No. 1508-348-004 A ExxonMobil Subsdary
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`Hearsg Exhint No. _.._.&jj-_&fl—
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`T e p— e -1
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`N WRISIETI | T 1 — EM10-028406
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`Exhibil No. ATC-273
`Page 2 of 4
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`TAPS Pipeline Strategic Reconfiguration Project
`Owner Oversight Process
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`The Project. The TAPS Owners (the "Owners®) have sanctioned the TAPS Pipeline
`Sirategic Reconfiguration Project (the "Project”). The Project shall be designed,
`constructed and operated in accordance with the Strategic Reconfiguration Pump Station
`Redesign Project Summary (the *Project Summary™),
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`Project Management Team. Alyeska Pipeline Services Company (“Alyeska) as TAPS
`Cperalar, is responsible o the TAPS Ownars Committes (the "OC") for ensuring
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`schedulo, cost, safety, operability, reliability and technical integrity of the Project in
`accordance with the Project Summary. Alyeska has established the Project
`Managemeni Team (tha "PMT") to manage the Project under Alyeska's direction.
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`Owner Oversight. Because ol the magnitude and tight timeline of the Project, the
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`Owners desire additional oversight capability. Owner oversight groups shall be created
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`and maintained during, at minimum, the two major phases of the Project - Project
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`Davelopment and Project Execution. Final decision-making authority lies wilh the OC,
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`and any Owner oversight groups-created shall strictly act in an advisory capacity to the
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`COwmars,
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`1. Project Development Phase. During Project Development, the TAPS Pipeline
`Planning Team (the *Planning Team"), an integrated Owner/Alyeska team, was
`charterad to:
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`Facilitata decisions by the Owners and Alyeska with regard to Project Issues
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`Address the need for planning input to Alyeska's developmanl process
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`Facilitale reconfiguration "oplimization® decisions
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`Define/secure any commercial input required by Alyeska
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`Coordinate Owners position on any arising commercial issues
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`Create a plan for sanction approval ol the Project to provide Owners with
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`“daecision support information” for their respective capital approval processes
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`- Participate in Owner Peer Reviews to evaluate decision support information
`generated by Alyeska
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`The Planning Team disbanded once the Project was sanclioned.
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`a. Adwvisory Board., During Project Execution, Owner oversight shall be coordinated
`by the Project Advisory Board (the "Advisory Board®), consisting of the Owner
`Altemates (the “Alternates™) and the Project Manager. Advisory Board
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`coordination shall include the ability 1o create ad hoc groups, all reporting to the
`Advisory Board, to evaluate defined areasfissuas that may arisa.
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`EM10-028407
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`Exhibit No. ATC-273
`Cwmer Oversight Efi% e
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`TAPS Pipeline Strategic Reconfiguration Project
`Owner Oversight Process
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`b. Technical Cversight Group. The first ad hoc group to be created by the Adviscry
`Board shall be the Technical Oversight Group (the "TOG"). The TOG shall
`provide oversight for alt technical issues.
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`i. Members. TOG membarship shall be comprised of one representative
`appointed by each Owner and one representative from the PMT (the
`*Members®)
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`ii. Procedures. The TOG shall choose its own chairman, keep regular minutes of
`s proceedings and report the same to the Alternates when requested, fix its
`own rules or procedures, and meet at such times and at such place or places
`as may be provided by such rules or procedures, or by resolution of the TOG,
`the Advisory Board or the OC. Thase procedures shall be documented in a
`*Team Charfar” to be established by the TOG and approved by the OC,
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`fi. Expenses. Each Member shall pay all expanses incurred by it relating fo its
`participation an the TOG.
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`iv. Technical Oversight Responsibiliiss. TOG oversight of technical issues shall
`include:
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`« Review progress reports provided by Alyeska
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`= Meel with the PMT, atlend PMT meetings and PMT meetings with their
`engineenng consultants and construction contractors on a frequency
`agreed to by the TOG
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`« Provide oversight of critical project issues
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`= Parficipate In peer reviews, which should be conducted al or nearing major
`milestonas, to evaluate decision support information generated by Alyeska
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`= Review and advise the Advisory Board or the OC as applicable on
`proposed changes or deviations to the Project (as defined In the
`Management of Change process) which exceed Alyaska's authority
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`* Monilor and appraise schedule, cost, safety, operabilty, reliability and
`technical integrity of the Project, and recommend corrective actions to the
`OC, it necessary, including the implementation of a proven quality
`assurance methodaology in accordance with the Quality Assurance process
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`» The right o seek, as necessary and al Member's expense, suppor in
`performing Projecl oversight from Member's Owner company, Owner
`affiliates or outside consultants
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`v. Project Supeérvision. Alyeska shall provide appropriate supenvisory,
`inspection, acministrative, technical, and other services as may be requirad for
`the Project. Each Member of the TOG, at its sole cost and expanse, may ba
`present to observe any and all aclivities being provided by Alyeska or its
`contractors associated with the Project, unless such presence unreasonably
`interferes with the performance of Alyeska or its contractors.
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`z P
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`EM10-028408
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`Exhibit No. ATC-273
`Cramer Chogrsight Ffiflé ard
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`TAPS Pipeline Strategic Reconfiguration Project
`Owner Oversight Process
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`vi. Quality Assurance’ Process. If the TOG determines that the schedule, cost,
`safety, aperability, reliability and/or technical integrity of the Project is al risk, i
`shall have the right to recommend o the OC correclive actions, including the
`implementation by Alyeska of a proven quality assurance methodology.
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`e. Other. The Owners may creale other subcommillees as needed to provide
`oversight of the Project during Project Execution and Project Start-up
`{Commissioning & Operations).
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`3. Management of Change
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`a. Changes lo Project. The PMT will manage the Prgject in accordance with the
`Project Summary. However, it is undersiood that Alyeska management or the
`PMT may recommend the need o modify Project aspects such as scheduls,
`materals, vendors or contractors for any number of justifiable reasons.
`Additicnally, the Owners may request modifications to various Project aspecis.
`The PMT will document the proper appraval of such modification through a
`management of change process.
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`However, due to the magnitude and tight timeline of the Project, changes
`must be rigorously managed to avoid scope creep and project delay.
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`b. MOC Malrix. The PMT, with consultation with Alyeska management and the
`Advisory Board, shall develop a Management of Change ("MOC") Matrix for OC
`review and approval. Tha MOC Matrix shall delineate the authority levels for
`MOC approval between the PMT, Alyeska management and the OC.
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`¢. Change Requests. Prior to making any deviation from the Project Summary, the
`PMT shall prepara a wriften management of change request and shall receive
`written evidence of approval from the appropriate authority level before
`implementing any such change. Such written managemant of change requast
`shall include, as a minimum, the following information; (a) a detailed description of
`the change; (b)the reason for such change; (c)the estimated cest of such
`change; and (d) the impact such change will have on the Project scheduls.
`Change requests with the appropriate approval level shall also constitule approval
`of any revision to any itern in the budgel required 1o implement such change. The
`OC will be responsive, as much as practical, in meeling Alyeska's timing needs in
`coordinating any such approval thergof, Alyeska shall be permitted to use its best
`judgment in situations where timing Is critical and where a delay in obtaining
`written approval may result in any negative impacts to safety, health or
`anvirgnmental protection or substantial additional costs. In these situations,
`Alyeska will keep the OC informed of the situation and document oral approval to
`the extent possible and then follow up with the proper management of change
`documentation.
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`EM10-028408
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