Operations Management System

The purpose of Kinder Morgan’s Operations Management System (OMS) is to capture our important operational objectives and expectations into a single management system. A management system is a framework that an organization uses to direct and control work to achieve its objectives in an intentional and continual manner. Every employee should be familiar with and receives annual training on the OMS. The main components of the OMS are:

  • Operations Management System (OMS)sets forth Kinder Morgan’s goals and policies for its physical operations;
  • describes Kinder Morgan’s approach to sound operations;
  • sets forth the roles and responsibilities for conducting sound operations;
  • establishes a set of processes to be followed in pursuit of Kinder Morgan’s operations;
  • incorporates Kinder Morgan’s environmental health and safety (EHS) requirements; and
  • provides for periodic changes, audits and assessments to improve and assess compliance with the OMS.

The OMS sets the goals, how we get there, each person’s responsibility in meeting those goals and a process for improving the system. The OMS establishes intentional, routine risk management activities, including the meetings below, that are designed to maintain compliance, to reveal and manage risk, and to continually improve our safety and compliance culture. To continuously improve, we publically report our EHS performance and strive to be better than industry averages and our own previous three years of performance.

Meeting Operations Topics Covered
Other topics are covered at several of the noted meetings.
Personnel Involved in Process
Weekly
Monday Management Meeting Financial Performance and EHS Incidents Office of the Chairman, Business Unit and Operating Company Presidents, CFO, General Counsel, Corporate Department Management
Monthly
Business Unit Operations Meeting
  • progress toward reducing risk of high consequence assets and operations;
  • internal and external incidents, near misses and lessons learned;
  • process improvements, efficiency and productivity improvements;,
  • progress on implementing systems to more assets and operations, more Operations Goals, and more regulatory and other requirements;
  • leading indicators and their meanings;
  • significant results of internal and external audits, evaluations, and assessments Including status of corrective actions where available;
  • stakeholder feedback; and
  • other KPIs.
Business Unit Presidents, Operating Company Presidents, COOs, Operations VPs and Directors
Major Project Review
  • projected capital expenditures;
  • projected in service date;
  • remaining risks to project costs or schedule;
  • projected EBITDA;
  • returns;
  • safety; and
  • quality
Office of the Chairman, Business Unit and Operating Company Presidents, Project Management, Corporate Department Management
Quarterly
Quarterly Business Review
  • Progress and plans with respect to reducing risk of high consequence assets and operation;
  • Internal incidents and lessons learned;
  • expansion project updates;
  • efficiency and productivity enhancements;
  • development and deployment of systems to ensure compliance with regulatory and Kinder Morgan requirements;
  • progress on contractor safety programs; and
  • the status and effectiveness of corrective actions resulting from significant previous management reviews.
Director level or above
Operations Group Meeting
  • proposed best practices for consideration across Kinder Morgan;
  • conflicts in interpretations of regulatory requirements identified by the EHS or legal departments;
  • proposed modifications to the OMS;
  • updates from the Working Groups; and
  • internal and external incident and near miss trends and lessons learned.
Corporate VP EHS, Business Unit COOs, Working Group Leads
Operations Working Groups
  • Incident Review; Pipeline Integrity; Operations Management System; Security; Disaster Preparation, Response and Recovery; and Regulatory Compliance
Working Group Members
Annually
Budget
  • Staffing, assets, systems and other resources needed for the Business Unit to operate in a safe, environmentally sound and efficient manner
  • Capex, Opex, Margins
  • Adjust budget for projects, contract changes etc.
  • Translated to a monthly plan
Manager level or above
Audit Plan Operations audit plan review and approval. Operational Audit Group, Legal, Corporate VP EHS and COOs
OMS review and revision Review requested changes to the OMS. Proposals for changes may be submitted by any Kinder Morgan employee. The Corporate VP EHS and COOs review the requested changes and make recommendations to the Office of the Chairman for approval. All Employees, COOs, Corporate VP EHS, Office of the Chairman
Incentive Compensation The Office of the Chairman will consider operations performance, including meeting Environmental, Health, and Safety targets, in allocating available incentive compensation among the Business Units and Business Unit Management will consider operations performance in allocating incentive compensation to individual employees. Office of the Chairman and Business Unit Management
2-3 years
Safety Culture Survey Employee survey to gauge employee perception of their safety culture and how this culture is changing over time. Business Unit Management and Operations

Pipeline SMSKinder Morgan participates in the Pipeline SMS Group. This group is a partnership among the Association of Oil Pipelines, the Interstate Natural Gas Association of America, the American Gas Association, and the American Petroleum Institute (API). The Pipeline SMS Group's goals are to educate shareholders and enhance safe pipeline operations through the application of API Recommended Practice 1173 (RP 1173). The group exchanges ideas, information and lessons learned following implementation of RP 1173 in an effort to advance pipeline safety for individual companies and the industry as a whole. Kinder Morgan’s OMS complies with the RP 1173. http://pipelinesms.org/