Executive Summary. Shell Offshore Inc. BY: Keith M. Gonzales Sr., P.E. Regulatory Requirements for Hazardous Locations

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Contents Executive Summary... 1 Regulatory Requirements in the Gulf of Mexico for Hazardous Locations... 2 Referenced Codes and Standards... 2 Memorandum of Agreement... 2 Bureau of Ocean Energy Management Regulation and Enforcement... 2 American Petroleum Institute... 3 NFPA 70 (National Electrical Code)... 3 United States Coast Guard... 5 Executive Summary All electrical equipment installed in the Gulf of Mexico (GOM) where the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE; Formerly the MMS) and the United States Coast Guard (USCG) are the Authorities Having Jurisdiction (AHJ), must meet American standards regardless if the facility is designed to American Class and Division or American Class and Zone as defined by the American Petroleum Institute (API). The API Class and Zone option is often confused with the Class & Zone that is defined by International Electrotechnical Commission (IEC) & European Standards, however IT IS NOT THE SAME. Equipment that will be used in the API Class & Zone must be certified & labeled AEx, meaning that it was tested to American (ANSI /UL) standards. The use of IEC/European electrical equipment (ATEX, Ex, EEx, CE, etc.) is not allowed in the API Class & Division/Zone on GOM production facilities. 1. Per 30CFR250 the AHJ on GOM production facilities requires that hazardous area classification be based on API RP 500 (Class & Division) or API RP 505 (Class & Zone) AND electrical equipment being installed in such areas MUST be done so in accordance with API RP 14F or API RP 14FZ. 2. API RP 14F and 14FZ requires that electrical equipment be installed per the National Electrical Code (NEC). 3. The NEC requires all electrical equipment to be marked for the Hazardous Area that it will be installed as certified by a Nationally Recognized Testing Laboratory (NRTL). The NRTL list is owned by the Occupational Safety & Health Administration (OSHA). ATEX is not an NRTL per OSHA. These NRTL s must test to ANSI/UL standards to be acceptable. 4. All Shell facilities currently in the Gulf of Mexico are designed to Class & Division (API RP 500). Therefore all equipment installed on a Shell GOM facility must meet the requirements of API RP 14F and the NEC. 5. This means all electrical equipment installed in a Hazardous Area on Shell GOM facilities must be certified for Class & Division. There is an allowance in the NEC to use zone rated equipment in Division 2 areas that is certified and labeled AEx, which is tested to American Standards. 6. The use of IEC/European electrical equipment (ATEX, Ex, EEx, CE, etc.) in Hazardous Areas on GOM production facilities is not allowed per AHJ regulatory requirements. Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 1 of 6

Regulatory Requirements in the Gulf of Mexico for Hazardous Locations Below are the regulatory references that show the requirements to which we design and build our facilities. These requirements are either in the Code of Federal Regulations (CFR) or referenced there in. The understanding of these requirements is from the CFR written requirement and the result of working with regulators and established governmental submittal and approval practices. Referenced Codes and Standards 30 CFR Mineral Resources, Bureau of Ocean Energy Management and Enforcement 46 CFR Shipping, United States Coast Guard Requirements API RP 500 Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class 1, Division 1 and Division 2 API RP 14F Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class 1, Division 1 and Division 2 Locations NFPA 70 National Electrical Code, with Governmental references to the 2002 edition. All referenced requirements were verified in the 2011 edition of the same. Memorandum of Agreement The Memorandum of Agreement (MOA) between the USCG and the BOEMREdefines the AHJ for the particular systems of a floater. For the purposes of installing electrical equipment in hazardous areas on a GOM production facility the USCG and the BOEMRE have shared jurisdiction. The following requirements are the same for both fixed leg and floating production facilities. Bureau of Ocean Energy Management Regulation and Enforcement The BOEMRE requirements are found in 30 CFR 250.114 and are attached below. TITLE 30--MINERAL RESOURCES CHAPTER II--MINERALS MANAGEMENT SERVICE, DEPARTMENT OF THE INTERIOR PART 250_OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF--Table of Contents Subpart A_General Sec. 250.114 How must I install and operate electrical equipment? The requirements in this section apply to all electrical equipment on all platforms, artificial islands, fixed structures, and their facilities. (a) You must classify all areas according to API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2, Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 2 of 6

or API RP 505, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Zone 0, Zone 1, and Zone 2. (b) Employees who maintain your electrical systems must have Expertise in area classification and the performance, operation and hazards of electrical equipment. (c) You must install all electrical systems according to API RP 14F, Recommended Practice for Design and Installation of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Division 1, and Division 2 Locations (incorporated by reference as specified in Sec. 250.198), or API RP 14FZ, Recommended Practice for Design and Installation of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1, and Zone 2 Locations (incorporated by reference as specified in Sec. 250.198). (d) On each engine that has an electric ignition system, you must use an ignition system designed and maintained to reduce the release of electrical energy. American Petroleum Institute The American Petroleum Institute (API) standards API RP 500 give the requirements for defining Hazardous Locations & API RP 14F gives the requirements for installing electrical equipment in those Hazardous Areas. In API RP 14F the following excerpts are pertinent to equipment installation. API RP 14F Section 1.2.1 1.2 Applicability of National Electrical Code 1.2.1 Electrical systems for offshore petroleum facilities shall be designed and installed in accordance with the National Electrical Code, 2008 edition, except where specific departures are noted. NFPA 70 (National Electrical Code) In the National Electrical Code (NEC) (NFPA 70-2011 edition), Zone Equipment is ONLY allowed according to 501.5, inserted below, with the caveat that it be labeled to 505.9(C)(2). The 505.9(C)(2), inserted below, requirement requires the equipment to be AEx certified. This means that it must be tested to American ANSI / UL standards. The small amount of equipment that is AEx certified often bears the Class and Division approval label in lieu of using this rule for applicability. Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 3 of 6

NFPA 70 (NEC) 501.5 501.5 Zone Equipment Equipment listed and marked in accordance with 505.9(C) (2) for use in Zone 0, 1, or 2 locations shall be permitted in Class I, Division 2 locations for the same gas and with a suitable temperature class. Equipment listed and marked in accordance with 505.9(C)(2) for use in Zone 0 locations shall be permitted in Class I, Division 1 or Division 2 locations for the same gas and with a suitable temperature class. NFPA 70 (NEC) 505.9(C)(2) (2) Zone Equipment. Equipment meeting one or more of the protection techniques described in 505.8 shall be marked with all of the following in the order shown: (1) Class (2) Zone (3) Symbol AEx (4) Protection technique(s) in accordance with Table 505.9(C)(2)(4) (5) Applicable gas classification group(s) in accordance with Table 505.9(C)(1)(2) (6) Temperature classification in accordance with 505.9(D)(1) Interestingly enough the NFPA 70 (NEC) Handbook 2011 Edition does offer a Fine Print Note, inserted below that gives the clarification that AEx means the equipment is tested to American Standards. It further gives the meaning of EEx and Ex, which are not compatible. Fine Print Note following NFPA 70 (NEC) 505.9(C)(2) The symbol AEx identifies the equipment as meeting American standards. In European Common Market countries, the symbol is EEx. In the IEC standards, on which American and European standards are based, the symbol is Ex. Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 4 of 6

API RP 14F Section 4.6.2 Requires equipment that will be installed to be marked with Class & Division or Class & Zone with AEx certifying that it meets the American ANSI / UL standards. API RP 14F Section 4.6.2 4.6.2 marking Equipment for use in hazardous locations shall be marked in accordance with items 1 or 2, below: 1) Division Equipment Equipment required by the National Electrical Code to be approved and labeled for Class I, Division 1 or Class I, Division 2 locations shall be marked to show the class, group and operating temperature or temperature range (see temperature identification number ) referenced to a 40 C ambient as follows: a) Class 1, Division 1 or Class I, Division 2, as applicable; and b) applicable gas classification group(s); and c) temperature classification. NOTE Equipment suitable for ambient temperatures exceeding 40 C shall additionally be marked with the maximum ambient temperature. 2) Zone Equipment Markings for relevant types of zone rated equipment are described in API 14FZ. In further requirement of the Zone markings section 4.6.4, inserted below, explains the same requirement that is found in the National Electrical Code. 4.6.4 Equipment listed and marked in accordance with NEC 505.9(C)(2) [Class, Zone, Symbol AEx, Protection technique(s) in accordance with Table 505.9(C)(2)(4) in the NEC, applicable gas classification group(s) in accordance with Table 505.9(C) in the NEC, and the temperature classification in accordance with 505.9(D)(1) in the NEC] for use in Class I, Zone 0, 1, or 2 locations shall be permitted in Class I, Division 2 locations for the same gas and with a suitable temperature class. United States Coast Guard The United States Coast Guard Code of Federal Regulations also enforces the same requirements as the API and NEC above. Inserted below is 46 CFR 111.105-1 through 111.105-3 which clearly requires the installation to be according to American OR European standards. Section 105-1 incorporates the National Electrical Code (NFPA 70 2002 edition). 46 CFR 111.105-1 through 111.105-3 TITLE 46--SHIPPING CHAPTER I--COAST GUARD, DEPARTMENT OF HOMELAND SECURITY (CONTINUED) PART 111_ELECTRIC SYSTEMS_GENERAL REQUIREMENTS--Table of Contents Subpart 111.105_Hazardous Locations Sec. 111.105-1 Applicability; definition. Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 5 of 6

This subpart applies to installations in hazardous locations as defined in NFPA NEC 2002 and in IEC 60079-0 (both incorporated by reference; see 46 CFR 110.10-1). As used in this subpart, ``IEC 60079 series'' means IEC 60079-0, IEC 60079-1, IEC 60079-2, IEC 60079-5, IEC 79-6, IEC 60079-7, IEC 60079-11, IEC 60079-15, and IEC 79-18 (all incorporated by reference; see 46 CFR 110.10-1). Subpart 111.105_Hazardous Locations Sec. 111.105-3 General requirements. All electrical installations in hazardous locations must comply with the general requirements of section 33 of IEEE 45-1998 (incorporated by reference; see 46 CFR 110.10-1), and with either Articles 500 through 505 of NFPA NEC 2002 (incorporated by reference; see 46 CFR 110.10-1) or with the IEC 60079 series (as defined in 46 CFR 111.105-1 and incorporated by reference; see 46 CFR 110.10-1). When installations are made in accordance with NFPA NEC 2002 articles, and when installed fittings are approved for the specific hazardous location and the cable type, marine shipboard cable that complies with 46 CFR subpart 111.60 may be used instead of rigid metal conduit. [USCG-2003-16630, 73 FR 65199, Oct. 31, 2008] Regulatory Requirements in the Gulf of Mexico for Hazardous Locations.docx Page 6 of 6