BP to fully resume East Java gas supply

The Jakarta Post, Jakarta

Anglo-American energy giant BP Plc. completed on Friday the repair work on leaks at its gas pipelines in East Java, a statement from the Ministry of Energy and Mineral Resources said.

The ministry said that gas supply to various industries in East Java could be fully resumed beginning Saturday.

The gas leak incident occurred on Dec. 29, prompting BP to shut down five of the 14 wells in the Pagerungan gas fields. The shutdown caused gas supply to fall down to 100 million standard cubic feet per day (MMSCFD) from the normal 180 MMSCFD.

Among the major companies affected by the supply cut were state-owned electricity company PT PLN Gresik, fertilizer firm PT Petrokimia Gresik and gas firm PT PGN, which distributes gas to various other industries.

BP has a specific contract as the sole supplier of gas in East Java. The contract stipulates that it will supply up to 600 MMSCFD to East Java until 2010. Other companies are only allowed in the market if demand exceeds 600 MMSCFD.

BP has been criticized for the gas pipeline leaks. President of state-owned oil and gas company Pertamina Baihaki Hakim said the leaks were partly caused by BP's negligence in maintaining its pipelines.