Govt upset with BP warning on damaged gas pipeline

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.