FAQ for Order MO-036-2022

Canadian Standards Association Z245 Standards

On 31 October 2022 the Commission of the Canada Energy Regulator issued Order MO-036-2022 [Filing C21733] requiring companies under the CER’s jurisdiction to procure and incorporate only components, pipe and pipe coating and coating applications that comply with the latest editions of several CSA Z245 standards. This document addresses some frequently asked questions related to the Order.

What is a “Miscellaneous Order”?

Miscellaneous Orders (MOs) specify requirements for miscellaneous matters, such as the upgrading of maximum authorized operating pressures, the conveyance, sale or lease of a pipeline or parts thereof, and the abandonment of pipelines that stipulate certain conditions a company must meet to be compliant.

What is this MO intended to do?

The purpose of MO-036-2022 is to require companies to procure and incorporate components, pipe and pipe coating, and coating applications that comply with the latest (2021) edition of the Canadian Standards Association (CSA) Z245 Steel flanges; the latest (2022) editions of CSA Z245 Steel pipe, Steel fittings, Steel valves, Plant-applied external coatings for steel pipe, and Field-applied external coatings for steel pipeline systems; and the newly published (2022) editions of CSA Z245 Induction bends and Cold bends. Alternatively, companies may procure and incorporate components, pipe and pipe coating and coating applications that comply with earlier editions or other standard(s) allowed by CSA Z662, provided they can demonstrate suitability, or that the other standards have the same key requirements, as determined by the company.

What does demonstrate suitability of earlier editions mean?

To demonstrate suitability, companies must show that components, pipe and pipe coating and coating applications provide at least an equivalent level of safety and environmental protection as the editions specified in the order. Companies are not required to file documentation that demonstrates suitability before procuring or incorporating components that comply with earlier editions, but should be prepared to do so, if requested by the CER.

Further, a definition of demonstrate is provided in the current (2019) edition of Z662, Clause 2.2.

Why is there a lag between the CSA update and when companies are required to comply with it?

The CER incorporates standards by reference and does not set the release schedules of these standards. The requirements that allow for regulated companies to procure and incorporate components, pipe and pipe coating, and coating applications manufactured to the CSA Z245 series of standards are in Clause 5 of the current edition (2019) of CSA Z662. The current edition (2019) of CSA Z662 references the most current editions of the CSA Z245 series of standards at the time of publishing. This causes an ongoing lag between CSA Z662 and the CSA Z245 standards. For example: The current (2019) edition of Z662 prescribes the use of the 2017 and 2018 CSA Z245 standards, whereas the 2023 edition of Z662 will prescribe the use of the 2021 and 2022 editions of the Z245 standards. Therefore, without intervention by the CER, companies could continue to use the 2017 and 2018 Z245 standards without additional demonstration of suitability until the 2023 edition of Z662 comes into force.

Additionally, Clause 2.1 of the current (2019) edition of CSA Z662 allows the user of the standard use newer or amended editions of referenced publications (i.e. the CSA Z245 series of standards). However, since CSA Z245.16 and CSA Z245.17 are new publications that haven’t previously been referenced, without the specific direction of this MO, CER-regulated companies would be unable to use components manufactured to these standards.

Can you explain a bit more about CSA Z245 requirements?

CSA Z245 is a series of standards that relate to the manufacture of components, pipe and pipe coating, and coating applications. The component standards in this series are:

  • CSA Z245.1 Steel pipe – This standard covers steel pipe primarily for transporting fluids in oil or gas pipeline systems.
  • CSA Z245.11 Steel fittings – This standard covers steel pipe fittings such as bends, tees, and reducers primarily for use in oil or gas pipeline systems.
  • CSA Z245.12 Steel flanges – This standard covers steel flange connections primarily intended for use in oil or gas pipeline systems.
  • CSA Z245.15 Steel valves – This standard covers steel valves primarily intended for use in oil or gas pipeline systems to control flow and isolate parts of the system.
  • CSA Z245.16 Induction bends – This standard covers factory-made induction bends primarily for use in oil or gas pipeline systems.
  • CSA Z245.17 Cold bends – This standard covers factory-made cold bends primarily for use in oil or gas pipeline systems.
  • CSA Z245.20 Plant-applied external coatings for steel pipe – This standard covers the coating application and related activities for plant-applied fusion bond epoxy (FBE) externally to bare steel pipe.
  • CSA Z245.30 Field-applied external coatings for steel pipeline systems – This standard covers the coating application and related activities for field and shop-applied coatings externally to steel piping.

What are the main updates to CSA Z245 in the 2021 and 2022 edition?

A summary of the main changes that are new to the 2021 and 2022 editions are provided in the Preface section of each of the CSA Z245 standards listed, with the exception of CSA Z245.16 and CSA Z245.17 which are new standards. CER-regulated pipeline companies should be aware of the revisions to the standard and how adopting the changes, or not adopting them until the next edition of CSA Z662, could impact their pipeline systems.

Specific revisions CER-regulated pipeline companies should be aware of include, but are not limited to:

  • heat treatment procedures;
  • mechanical test requirements including Charpy V-notch impact tests, weld notch-toughness tests and chemical test requirements;
  • quality management requirements; and
  • records management requirements.

Can the CER enforce this MO’s requirements if it does not regulate manufacturers or distributors?

Yes. This MO applies to CER-regulated pipeline companies procuring components from manufacturers or distributors, and not to manufacturers or distributors themselves. As with any MO it issues to CER-regulated pipeline companies, the CER has the authority to enforce this MO’s requirements.

How does this affect in-stock components and coatings, which were not manufactured to the 2021 CSA Z245.12 or 2021 CSA Z245.1, 11, 15, 16, 17, 20, and 30 standards?

Companies can still use components, pipe and pipe coating, and coating applications that comply with earlier editions of the Z245 standards, or other standard(s) allowed by the current (2019) edition of CSA Z662 provided they can demonstrate suitability, or that the other standards have the same key requirements, as determined by the company.

Clause 5.1.2 b) of the current (2019) edition of CSA Z662 allows for use of materials that comply with the 2014 or earlier editions of the six Z245 standards, provided the company demonstrates suitability. In-stock components, pipe and pipe coating, and coating applications that were manufactured to the earlier editions of the six revised Z245 standards listed in the MO, or other standards allowed by the current (2019) edition of CSA Z662, may incorporated, provided that the regulated company is able to demonstrate suitability, or that the other standards have the same key requirements, as determined by the company.

Does the MO apply to components, pipe and pipe coating, and coating applications not listed in the Z245-21 and Z245-22 standards?

No. The Order only applies to components, pipe and pipe coating, and coating applications covered by Clause 1, Scope, of the Z245-21 and CSAZ245-22 standards. Components outside the scope of these standards may be procured to other standards, provided these standards are allowed by CSA Z662-19.

If you have any questions regarding Order MO-036-2022, please contact the CER via email at researchandinnovation@cer-rec.gc.ca.

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