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. Page 1 of 17 Pipeline Integrity for Industrial Metropolitans: Managing the Urban Infrastructure Crisis By Ronald Maurier, Quest Integrity Stafford, Texas, USA Abstract On July 31 st , 2014 the city of Kaohsiung, Taiwan experienced one of the most catastrophic urban pipeline failures in history. The failure, ultimately attributed to post-construction interference, (3 rd party), was initiated many years earlier. A series of ensuing explosions, resulted in 32 deaths, 321 injuries, countless buildings and vehicles damaged or destroyed and devastation of public infrastructure. [1] Latest reports tally the on-going restitution cost now well beyond 1 billion USD. In reaction to the public outcry for safety, the Kaohsiung city regional government commissioned an in-depth international pipeline safety probe with the purpose of; Reviewing latest technologies for testing and inspecting petro-chemical pipelines including those considered unpiggable. Global standards and recommended assessment practices to be purpose driven for establishment of perpetuating pipeline integrity management programs in south Taiwan. Prescriptive regulations trained on operational integrity and corporate awareness for pro- active management of all threats (risks) associated with an extensive, but largely invisible (buried) uncharted, and unpiggable petro-chemical pipeline infrastructure situated with-in an urban-industrial municipality. On May 18 th , 2017 after more than two years of study and deliberation, government regulations for pipeline safety management were approved. Eighty-nine (89) petro-chemical pipelines in the Kaohsiung jurisdictional region, are now required by law, to be inspected with In-Line Inspection (ILI) technology during the coming twenty-four (24) month period ending May 18 th , 2019. Additionally, a second inspection of each pipeline will be required in the following five (5) year period to provide a basis for ongoing comprehensive integrity management. This paper will explore the pre-regulatory compliance and leadership position established by the Formosa Plastics Corporation (FPC) as they become one of the first pipeline operators in the region to provide detailed integrity results for pipelines under their ownership. A four (4) line petro- chemical pipeline inspection program was commissioned in late 2016 and successfully completed in February 2017; three (3) months prior to the final Kaohsiung pipeline regulation enactment. In

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Page 1 of 17

Pipeline Integrity for Industrial Metropolitans: Managing the Urban Infrastructure Crisis

By Ronald Maurier, Quest Integrity Stafford, Texas, USA

Abstract

On July 31st, 2014 the city of Kaohsiung, Taiwan experienced one of the most catastrophic urban pipeline failures in history. The failure, ultimately attributed to post-construction interference, (3rd party), was initiated many years earlier. A series of ensuing explosions, resulted in 32 deaths, 321 injuries, countless buildings and vehicles damaged or destroyed and devastation of public infrastructure. [1] Latest reports tally the on-going restitution cost now well beyond 1 billion USD. In reaction to the public outcry for safety, the Kaohsiung city regional government commissioned an in-depth international pipeline safety probe with the purpose of;

• Reviewing latest technologies for testing and inspecting petro-chemical pipelines including those considered unpiggable.

• Global standards and recommended assessment practices to be purpose driven for establishment of perpetuating pipeline integrity management programs in south Taiwan.

• Prescriptive regulations trained on operational integrity and corporate awareness for pro-active management of all threats (risks) associated with an extensive, but largely invisible (buried) uncharted, and unpiggable petro-chemical pipeline infrastructure situated with-in an urban-industrial municipality.

On May 18th, 2017 after more than two years of study and deliberation, government regulations for pipeline safety management were approved. Eighty-nine (89) petro-chemical pipelines in the Kaohsiung jurisdictional region, are now required by law, to be inspected with In-Line Inspection (ILI) technology during the coming twenty-four (24) month period ending May 18th, 2019. Additionally, a second inspection of each pipeline will be required in the following five (5) year period to provide a basis for ongoing comprehensive integrity management.

This paper will explore the pre-regulatory compliance and leadership position established by the Formosa Plastics Corporation (FPC) as they become one of the first pipeline operators in the region to provide detailed integrity results for pipelines under their ownership. A four (4) line petro-chemical pipeline inspection program was commissioned in late 2016 and successfully completed in February 2017; three (3) months prior to the final Kaohsiung pipeline regulation enactment. In

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this leadership role, FPC were able to demonstrate successful integrity assessment of the complex pipelines with low risk ILI pigging, global position line mapping, pressure-testing, and timely re-commissioning results. All notable accomplishments considering the work was completed ahead of schedule and under conditions often cited as inspection barriers by operators of similar (unpiggable) pipeline networks. The results of this project now provide guidance and direction for many of the regions pipeline operators facing similar integrity challenges for the first time.

Further discussion will address operational issues that arise from post-construction, public and private infrastructure growth on or near pipeline right-of-ways. In an on-going struggle to maximize industrial productivity while minimizing environmental impact and annexation of additional lands, pre-existing pipelines often find themselves intersecting with new utility corridors, public works developments, and installation of other important structures, all of which were unknown and unplanned for in the initial engineering and design of the pipeline. With continued pressures from all sides, future pipeline operations and integrity management programs in all countries, will have to adopt highly diligent monitoring methods to identity, and more importantly, prevent the mechanisms that contribute or lead to product release threats before they occur.

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Introduction: July 31, 2014 -A Watershed Moment in Taiwan History

Shortly before midnight on the evening of July 31st, 2014, a 4” petro-chemical transfer pipeline located within the Kaohsiung City (Taiwan) metro area began leaking propylene liquid gas into an intersecting drainage aqua-duct (sewer). [2] The escaping propylene spread and vaporized throughout the municipal drainage sewer system for approximately 3.5 hours before an ignition source caused a series of massive explosion. Preceding the explosion, numerous “smell of gas” leak reports were called into emergency services by surrounding area citizens. Emergency response “follow-up” investigation activities placed dozens of “first responders” directly in the path of the explosions. The catastrophic explosions killed 32 people and caused injury to an additional 321 individuals. [3] Devastation extended to countless buildings, homes and autos which were extensively damaged or destroyed. Additionally, 6 kilometers of public roadways were ripped apart, expansive segments of public utility infrastructure such as power, telephone, water and sewage were all also, completely destroyed (see Figure 1).

Along with the public outcry for pipeline safety, the fatalities and devastation created an undeniable “watershed moment” for pipeline operations and integrity management in South Taiwan. Unfortunately, it took this catastrophic event to create a turning point and a time for stringent safety regulations where none existed before in Taiwan. [4]

On May 18th, 2017, after more than two years of study and deliberation, government regulations for pipeline safety management were approved. Eighty-nine (89) petro-chemical pipelines in the Kaohsiung City jurisdictional region, are now required by law, to be inspected with In-Line Inspection (ILI) technology during the coming twenty-four (24) month period. Additionally, a second inspection of each pipeline will be required in the following five (5) year period to provide a basis for ongoing and comprehensive integrity management.

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Figure 1. Explosion and damage caused by a pipeline failure in Kaohsiung City, Taiwan

The subject 4” petro-chemical pipeline, a non-Formosa Plastics Corporation asset, was constructed and placed into service in 1990. The unpiggable 4” pipeline had little in the way of as-built records and had not been inspected since its commissioning some 24 years earlier. The ensuing investigations unearthed a bewildering situation where the recorded line owners declared that they were not responsible for line maintenance and integrity management. The listed owners went on to publically declare that they had never even considered inspected the pipeline because they (the company) "did not have the keys." [5]

A spokeswoman for perceived owners went on to state that the pipeline was designed, constructed, and as they believed maintained, in an evergreen agreement by a separate state-owned company. “While it is true that we paid for the design and construction of the pipeline we have no responsible for the maintenance; we don't even have the keys to the maintenance tunnel," (buried segment of the line accessible through a service tunnel).

A contradictory viewpoint was provided by the state-owned company who built the line as they claimed their responsibilities terminated when the construction was completed and the line was

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turned over to the contract holders, the petro-chemical plant operators. In a prepared statement the state-owned company cited, "The pipeline is their property. They possess the rights to use the pipeline, and with these rights the responsibility to maintain the pipeline. We have never held maintenance agreement or contracts with this petro-chemical operator for the on-going integrity or safety of this pipeline." Subsequent discovery concluded that an apparent oversight in the (sale) transfer agreement which lacked clarity thus creating a “loop hole” which unwillingly fostered an environment of misunderstanding with respect to the clear assignment of maintenance and inspection responsibilities going forward.

On December 18, 2014, the government failure investigation concluded. The CEO and five (5) employees of the petro-chemical Company, (pipeline owner) three (3) employees of an affiliated terminals and distribution operation facility, and three (3) employees of the city public works bureau were indicted for their role in the incident. Further to the integrity management ruling, the regional government also reviewed all ownership and maintenance agreements to ensure that any existing integrity management gaps would be clearly assigned, and that on-going inspection responsibilities would be placed, all with the thirteen (13) petro-chemical operating companies that own the eighty-nine (89) chemical pipelines operating within the regulated region.

So what happened; how did this twenty-four (24) year old pipeline fail?

According to reports, the pre-existing pipeline experienced some interfering damage from construction activities of a local city public works project. The upgrade / installation of a sewage drain “box-culvert” created some contact with the pipeline that went unreported or undiscovered by other inspection or follow-up means. Although the line did not fail immediately, the mechanism for failure was set into motion and the worldwide number one pipeline failure cause element, third party damage*, was set into motion. Under the unregulated pipeline integrity management circumstances, it was only a matter of time before failure would occur.

As tragic as the failure would have been under normal buried pipe circumstances, the fact that the pipe span which failed was directly above a source of free-flowing water made it infinitely worse.

*Excavation damage (34%) and Outside force (33%) combine to create approx. ⅔ of reportable pipeline incidents. Source: PHMSA [Pipeline & Hazardous Materials Safety Administration] USA

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In the ensuing 3.5 hours from notation of abnormal operations and reported “smell of gas” calls, thousands of liters of product leaked from the pipeline and spread throughout the underground city drainage system with the natural flow of water / sewage. [3] See Figure 2 for layout detail.

Figure 2. Map illustrating infrastructure of impacted area in Kaohsiung City.

Could this failure have been prevented? By most pipeline integrity professional standards, it is believed that with diligent inspection during construction activities, enhanced with routine in-line

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inspections that many of these sorts of conditions are routinely discovered and remediated well before failure, and are therefore preventable. Although debatable, a case can be made that the true cause of failure in this circumstance was in the management of the industrial-urban infrastructure crisis. That is to say the on-going trend to include more and more infrastructure within the same confined spaces. As cities and industrial regions grow, the utilities and infrastructure needed to support them are inadvertently impacted by the limited space in which to expand and safely house them.

Infrastructure Growth and Pipelines

Infrastructure development is recognized by economists as the basic catalyst in which economic growth is built upon. Roads, water systems, buildings, mass transportation, airports, shipping ports, utilities and pipelines are all examples of infrastructure. Infrastructure covers those supporting services that help the growth of directly productive activities like agriculture, industry, and manufacturing. These services include a wide range starting from the provision of health and education facilities to the supply of such needs as raw materials, electrical power, irrigation, transport, communication, petroleum and general technology.

Infrastructure has a two-way relationship with economic growth. Infrastructure nurtures economic growth, and economic growth demands change and improvement in infrastructure. Infrastructure development such as transportation has been proven to improve national productivity significantly. A close association between infrastructure and Gross Domestic Product (GDP) growth has been observed in many studies. These studies indicate that a 1 per cent growth in the infrastructure (asset capacity) is associated with a corresponding 1 per cent growth in per capita GDP. Therefore, it can be concluded that continued growth will, in turn, make continued demands not just on infrastructure but in the space available to create and develop this needed infrastructure.

Developing “urban-industrial” economies stress existing infrastructure for increased capacity (upgrade, in-situ modification), or go beyond workable limits thus demanding greater assets not yet in place (new construction). Urban infrastructure expansion is a growing and undeniable need in many industrial areas but is most notable in the industrial megacities, (population in excess of 10 million), mostly found in Asia. These areas of high need become exceedingly

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complex to serve due to the very high population density where free space for expansion is near non-existent (see Figure 3).

Right-of-Ways, Infrastructure Growth, and Shared Utility Service Easements

In the context of property law, an easement or “right-of-way” is in fact the right to travel over someone's land and to have the reasonable use and enjoyment of their property as long as it is not inconsistent with the owner's use and enjoyment of said land. The right-of-way may be a specific grant of the land, or otherwise an easement, which is essentially the right to pass across another's land for specific purpose such as repair of telephone lines or natural gas pipeline systems. The “Grantee” of such easements shall be strictly liable for all damages and losses caused by or arising from, the construction, maintenance, repair, replacement, or operation of the existing service by the Grantee, his employees, and or his agents.

In an effort to keep rising costs for utility services in check many municipalities grant utility operators access to existing right-of-ways. The created “shared” easements, often found near or directly under public roads, can be cohabitated by six or more service utilities and on occasion along with petro-chemical pipelines. Complexity is high in the planning of new installation, repair / upgrade, or even with just routine maintenance.

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Downtown street excavation demonstrating buried utility services and pipes.

Industrial area street excavation demonstrating power, water, electrical and petroleum pipelines.

Figure 3. Examples of complex pipeline infrastructure challenges in metropolitan areas.

While cost savings are generated, sharing of utility right-of-ways does not come without significant cause for concern. On-going expansion or maintenance activities in crowded corridors provides opportunity for unplanned interruption of service, and/or threats to public safety when, for example, third party impacts are suffered by natural gas utilities, petroleum pipelines, or other contained pressure services. There have been numerous reported cases of large diameter water distribution line damage, which have washed out roadways or caused significant infrastructure damage due to high flow, wash away, erosion.

The Common Corridor Phenomenon

With industrial growth comes continual need for supporting infrastructure, whether it be new or upgrades to existing facilities. Finding free and direct space to install new service utilities is

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problematic in areas which are already heavily developed. Often the only viable solution is to work in existing corridors with upgrades or new installation next to pre-laid and in-situ ones. As reported by the office of U.S. Office of Pipeline Safety (OPS), 55% of operating hazardous liquid pipelines in the United States were installed before 1970; or to align with generational career spans, 71% installed before 1980. It is not difficult to conceive that these pipelines and their assigned right-of-ways have seen much expansion and development since their installation. Assuming similar development and installation relationship on a global basis, it is not difficult to conclude that the expansion has created heightened risk to existing pipelines (or even service utilities) in the form of harmful interference during the construction work, be it immediate or be it initiation of a gradual failure mechanism. Damage or failure of one of the services can lead to further damage and failure to those neighbouring it. Often it is only a question of time before these impacts are observed as failures. With respect to pipeline impacts and damages, they can only be prevented through diligent on-site supervision of nearby activities as they occur and in future and routine in-line inspections (ILI).

Common corridor incidents or impacts can take one of two forms; immediate or delayed failure.

Figure 4. The relationship between neighboring utilities and how failure of one often leads to harmful impact to adjacent ones, thus creating opportunity for further failures in the

common utility corridor.

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Figure 5. Impacted area with extensive roadway, vehicle and structural damage from Kaohsiung pipeline failure (impacted by intersecting drainage culvert).

In the case of the July 31, 2014 Kaohsiung incident, the pipeline failure was initiated by damages caused by improvement of the drainage conduit many years earlier. The eventual explosions from the release failure of the pipeline created a catastrophe cascade of failures to numerous utilities throughout the impacted areas [6] (see Figure 5). The ignition of the released gas created explosions that destroyed existing infrastructure from electrical, water, natural gas, sewage (drainage) and transportation systems. In most pipeline failure, the loss is limited to the use of the line and the inability to provide material to the end user(s). In congested industrial areas such as was the case in Kaohsiung, the losses extend well beyond the pipeline to fatalities and injuries and to critical utility and transportation networks.

Formosa Plastics Corporation (FPC) – 2017 Lin Yuan Inspection Program

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Formosa Plastics Corporation (1301:TT) (http://www.fpc.com.tw) established in 1954, is Taiwan’s leading supplier of intermediate raw materials for plastic manufacturing. With 2016 total revenues of US$55.2B, main products produced from +40 FPC plants include PVC resins, VCM, caustic soda, hydrochloric acid, MBS, HDPE, EVA/LDPE and LLDPE. As one of the few global companies with significant capacity for carbon-fiber development (8,750 MT/Y) FPC has been recognized for substantial contribution to the development of the high-tech manufacturing sector in Taiwan. Current expansion plans have FPC pushing ahead with the No.6 Naphtha Cracking Project, which will includes a total of fourteen additional plants. In addressing and resolving bottlenecking the No.6 Naphtha Cracking Project will not only add the company's operating revenue, but also help to relieve the Taiwan national shortage for basic petrochemical raw materials.

In accordance to local regulatory policies, FPC had initiated plans for the hydro-static pressure testing of four (4) product transfer pipelines during a planned maintenance turnaround. In recognition of the pending government pipeline integrity maintenance regulations, FPC management elected to expand the pressure testing program to include in-line inspection. As the four pipelines had never been pigged, and since the maintenance turnaround had a limited number of days, FPC engineering focused on in-line inspection tools that provided the lowest navigational risk (prevention of line blockage), while providing highest detection and accuracy of both mechanical deformation and wall loss anomalies. Additionally, detailed line mapping and corresponding Taiwan datum for latitude, longitude and elevation of all reported ILI features was also a top priority. For these reasons, plus a demonstrated ability to execute complex multi-phase projects of this nature in a turnkey arrangement, Quest Integrity and the InVista™ ultrasonic ILI tool were selected to complete the work.

The main elements of the integrity program to be completed “offline” with nitrogen gas and water at restricted (low) pressures included;

• Supply launchers / receivers and temporary flow lines to support pigging works. • Temporary pumping and water management (supply to disposal). • Pipeline cleaning. (in air) Pig tracking and Above Ground Marker (AGM) deployment. • Pipeline inspection. Deformation and wall loss (in water). • Pipeline Mapping (+/- 1 M accuracy) and isometric drawing supply. • Hydro static pressure testing. • Dewatering and drying (-45oC). • Deliver line(s) in “Ready for Product” delivery service mode.

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The four lines included one 6”, one 6/8”, one 8” and a 4/6” dual diameter pipeline. Approximate length of lines between 1,500 to 2,300 meters and the lines were all in a common corridor. Pre-job planning between FPC engineering and the Quest Integrity project team created an integrity program schedule that corresponded to the needs of the larger maintenance turnaround. Outside of mob-demob and site set up activities a 7-day window was planned for each of the 4 lines (see Figure 6, “Planned” schedule).

Figure 6. Planned project execution schedule (top); actual project execution schedule (bottom).

By collaboration of the teams and application of inspection and pipeline pigging experience, the actual program (see Figure 6, “Actual” schedule) was completed 10 days ahead of schedule, a testimonial to effective planning and risk mitigation. In a show of cooperation, FPC management permitted (allowed) other regional petro-chemical (plant) inspection engineers (who would soon be facing the challenge of inspecting their pipelines in order to complete with pending regulations), the opportunity to observe various aspects of the inspection process. Demonstration of the process provided a real-time tutorial while promoting FPC’s willingness to be an emerging lead in safety and integrity management of pipelines in Taiwan.

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The inspection results identified some areas of corrosion as well as some areas where mechanical damage, denting, had occurred. The results of the inspection were typically in line with anomaly discovery of other pipelines of similar operation and similar urban-industrial locations. While no immediate repair conditions were reported, one specific area of external corrosion concern included an elevated aerial span which has since been remediated. The four pipeline were all determined to be “fit-for-service” as defined by API 579 Part 5 Level 2, fitness for service criterion.

A Changing World

Unlike the U.S.A., Taiwan has no National Pipeline Mapping system or common platform / information sharing system. The same can be said for the various utilities which serve the industrial regions of Kaohsiung. In a world of constant change, the greatest threat to pipelines still remains the activities of “change itself” and the impacts that change can create. Third party intervention created by completion of new construction and the maintenance activities associated with the (change) work continual drive risk to safe pipeline operations. One could even argue that the lack of change, necessitated by required maintenance and system upkeep, to target or adjacent utilities can and often does, create threat, as is seen in examples of collateral pipeline and service utility damages throughout the world.

By example, Google Earth aerial views of the surrounding area of the FPC pipelines taken in 2003 and again in 2017 demonstrate a significant increase in structural density, or urban industrialization (see Figure 7). New factories, workshops, and residences not only fill the vacant space, they create additional strain on public roadways, service utilities, and infrastructure.

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Figure 7. 2003 aerial view of the general region surrounding the FPC pipelines (left); 2017 aerial view of the general region surrounding the FPC pipelines. Note significant

development of the area as visible by additional structures (right).

The greater the need for infrastructure, the greater the risk for impacting the unknown be it in immediate failure, or in initiation of mechanisms that create eventual and inevitable failure. [6] The solution is in diligent and repeated inspections and in the sophistication and completeness of the information system which manages and documents all change so as to prevent incidents today and tomorrow.

The Kaohsiung regional pipeline integrity and safety management regulation is establishing the framework for safe and reliable pipeline operations going forward, but it will require the determined efforts of many. To reiterate the impact that infrastructure change plays on the management of pipeline integrity, a final “case study” demonstration is made.

The mapping deliverable for the inspection of these four pipelines required an exportable .kmz Google Earth file. In February 2017, the planning and official reporting for this project demonstrated the physical location of the pipelines on the most current Google view, that being dated as November 17, 2015. During preparation of this paper, a newer Google Earth image was discovered having only been made available April 15, 2017. Note the changes in the high-lighted circles in Figure 8.

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Figure 8. Consistent infrastructure change illustrated by the removal of several storage tanks over the course of a two year period.

It is easy to see that several storage tanks have been dismantled and removed from the area of the pipeline. Although these images cannot determine if the demolition work threated the pipelines in any way, it does demonstrate that infrastructure change is occurring constantly. What cannot be seen is what underground facilities may have been harmed or removed and how they could potentially have impacted the pipelines or the systems which help protect the pipelines, such as warning signage and cathodic protection systems.

Essentially this is becomes the conclusion and the lesson learned in the execution of this inspection program and in the preparation of this paper; pipelines in urban-industrial areas face much great threat from elements that were never a part of the original design criteria. How would one be able to predict urban and infrastructure change 30 years into the future? The new reality lies within being able to manage the impacts of change with inspection. The lessons learned, and the actions taken in Kaohsiung are very transferrable and should be seriously considered in urban industrial areas worldwide that do not yet have pipeline safety and pipeline integrity management regulations and guidelines in place. Certainly, complacency or a “lack of knowledge” should never be cited as reasons which could enable another July 31, 2014 catastrophe to ever occur again. Certainly government regulation can drive change, but operational responsibility and reliability should lead the way.

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References

[1] “Taiwan Gas Blasts in Kaohsiung Kill at least 25,” 2014. [Online]. Available: http://www.bbc.com/news/world-asia-28594693.

[2] Y. Hui Ning, J. Chen, T. Kao, H. Chiu, H. Tsai and J. Chen, “Chemical Engineering Transactions,” 2016. [Online]. Available: 48, 721-726 DOI:10.3303/CET1648121 .

[3] “2014 KaohsiungGas Explosions,” 2017. [Online]. Available: https://en.wikipedia.org/wiki/2014_Kaohsiung_gas_explosions.

[4] “Kaohsiung City Council Passes Rules for Petrochemical Pipelines,” Focus Taiwan, May 2015. [Online]. Available: http://focustaiwan.tw/news/aeco/201505210036.aspx.

[5] “Owners Never Inspected Taiwan Gas Pipeline,” South China Morning Post, 4 August 4014. [Online]. Available: http://www.scmp.com/news/china/article/1566101/owner-pipeline-caused-deadly-blasts-kaohsiung-never-inspected-it.

[6] “Lessons From Kaohsiung’s Explosion Tragedy,” 2014. [Online]. Available: http://www.ketagalanmedia.com/2014/08/03/lessons-kaohsiungs-explosion-tragedy/.