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h9 KLEINFELDER <br /> 3 BACKGROUND <br /> The subject site consists of six (6) Above Ground Storage Tanks (ASTs) associated with the Mel <br /> Rice Terminal located at the Port of Stockton. The tanks range in storage capacity from <br /> approximately 100,000 gallons to 3,000,000 gallons, and are located in an area approximately <br /> 575 feet by 160 feet. IRM stores only Urea Ammonium Nitrate Solution (UAN 32) in the tanks. <br /> Mel Rice Terminal acquired certain assets at the Port of Stockton and a long term lease on the <br /> ground under these assets in mid 1984. The former tenant and owner of the tanks was National <br /> Molasses Co. (Namolco) which was a subsidiary of Brewer Chemical Co of Hawaii. The <br /> terminal was then leased to a partnership of Moyer Chemical (Fresno) and Bakersfield Ag Chem <br /> (Bakersfield) for the storage of UAN32. Chevron then sold its fertilizer business to Unocal <br /> Chemical and the lease was assigned to Unocal. In 1996 two additional tanks and additional <br /> property were added and Can 17 product was added. Unocal sold its fertilizer business to <br /> Canadian company, Agrium Co. and the lease was assigned to them. Agrium terminated the <br /> lease as of December 31, 2003 and the terminal was leased to IRM which is the current tenant <br /> and stores only UAN32. <br /> Rice Terminals is located at the west end of Port Road A, Port of Stockton, Stockton, California <br /> at approximately —121.3354 Longitude and 37.9479 Latitude on approximately 2.5 acres. The <br /> facility consists of seven welded steel tanks, six of which were previously used for the storage of <br /> liquid urea ammonium nitrate 32% solution (UAN32) and liquid calcium ammonium nitrate 17% <br /> solution (CAN17). The seventh is used to store storm water. These products are non- <br /> combustible. <br /> Product is received by ship, barge, railcar and truck. Product received by ship and barge transfer <br /> the product via hose(es) and pump(s) to pipelines from docks 12-13 to Rice Terminal tanks. An <br /> independent marine surveyor determines quantity discharged and received. Products received by <br /> railcar and truck is via commercial bill of lading. Truck receipts are unloaded by the truck <br /> driver. Rail receipts are unloaded via Rice Terminal hoses into Rice Terminal tanks. Manual <br /> and computerized records are maintained of all receipts and shipments and a physical inventory <br /> is taken at the end of each month and reconciled to these records. Title to the product remains <br /> with the tenant, not Rice Terminal. <br /> According to Mr. Tom Kramer of IRM, IRM contracted with Gary Powers of Powers <br /> Engineering of Benicia, CA, to test the integrity of the six tanks at the Mel Rice Terminal in <br /> December of 2004. The tests were reportedly performed according to the American Petroleum <br /> Institute (API) 653 standards. The testing reportedly included visual inspections, ultra thickness <br /> testing and helium testing on the outsides and insides of Tanks 1 through 6 (See Plate 2 for tank <br /> designations). Tank 1 passed inspection on December 31, 2004, Tank 2 of March 15, 2004, <br /> Tank 3 on March 9, 2004, Tank 4 on January 1, 2004, and Tanks 5 and 6 on January 11, 2004. <br /> IlZM reported that no product (UAN),was placed in these tanks by IRM prior to receiving a valid <br /> test certificate from Powers Engineering. <br /> 43851.E01/ST05R158/DH:ly Page 3 of 12 <br /> ©2005,Kleinfelder,Inc. February 9,2005 <br />