Govt upset with BP warning on damaged gas pipeline

The Jakarta Post, Jakarta

The government rebuked Anglo-American energy firm BP PLC for warning that damage to an underwater gas pipeline from its gas field in the Kangean Island off East Java posed a threat to public safety, rejecting the remark as incorrect and inappropriate.

"The pipeline's condition isn't as bad as BP has described," acting director general for oil and gas at the Ministry of Energy and Mineral Resources Kardaya Warnika was quoted as saying by Antara on Tuesday.

Strong currents have ripped loose the buffers that fasten the underwater pipeline to the seabed, according to a BP press release last week. It said the condition might lead to pipeline failure resulting in fires or explosions.

Kardaya said BP's report was based on preliminary findings from an independent consultant whom state oil and gas company Pertamina had hired to check on the pipeline.

"So it should have been Pertamina making this statement instead of BP," Kardaya said, adding the latest findings revealed the pipeline was in a "normal condition".

BP president Bill Schrader met the government last week and expressed regret for issuing a press statement he said had embarrassed officials here, according to a source.

"But I have also explained to them that the release's content was correct and that we are very concerned about the threat this poses to the public as long as the pipeline is not repaired," the source quoted Schrader as saying.

In its release, BP warned ships of the possible danger of fire and explosions inside the area along which the underwater pipeline channels natural gas to Java.

The 440 kilometer-long pipeline connects BP's gas fields on the Kangean Island, which is near Madura island off East Java's northwest coast, with gas markets in Java. There is a 370 kilometer-long section of the pipeline that passes the Java Sea.

The area is frequented by ships carrying cargo to and from Indonesia's second largest industrial city Surabaya.

"In the event of pipeline failure there is a risk of loss of life due to fire and explosion, or the sinking of a vessel passing over the pipeline rupture point," BP's release said.

It said the area, four nautical miles (seven kilometers) wide and 40 nautical miles (72 kilometers) long, should be considered a danger zone.

According to BP, the government has promised to help prevent ships from entering the area through Navy patrols and announcements.

But it might also cut its gas production to ensure public safety if maritime activities continue in the area.

BP supplies 200 million cubic feet of gas per day to state- owned electricity company PT PLN, fertilizer firm Petrokimia Gresik and state-owned gas distribution and transmission firm PT PGN. PGN distributes gas to industrial operations in the province.

Pertamina president Baihaki Hakim said he had not seen the consultant's report but added the situation could not be as bad as BP had described.

Although Kardaya has said the pipelines were normal, Pertamina promised last week to fix the damaged pipeline in what could take three months, starting November.

It said the repair works would slow down the gas supply from Kangean. BP's main customer PLN assured the public that it had readied oil fuel to fire its power plants in East Java.