PGN?s potential loss from pipeline explosion in East Java may reach US$6 million

State owned gas distribution and transmission company PT Perusahaan Gas Negara (PGN) said its potential loss as the result of the explosion at the East Java Gas Pipeline (EJGP) is estimated to reach around US$6 million during the two-month improvement period.

PGN?s president director Sutikno said in a statement Thursday that comprehensive improvement is needed to fully resume the supply of natural gas amounting to 80 MMSCFD from Santos by relocating the exploded gas pipeline to another safer area. ?It will take about two months to complete the whole improvement measures that include physical works,? he said.

To speed up the resumption of gas supply to its industrial customers in East Java, PGN has asked oil and gas company Pertamina to take several control measures it has proposed.

They include installing a new line valve or a blind end close to PGN?s offtake station in Porong, reopening Pertamina?s ORF in Porong, retransmitting gas from Santos and shifting the transmission to an interconnection pipeline network owned by PGN to Pasuruan, Mojokerto and Waru.

?It will take around a week to complete the control measures. Hopefully, PGN can receive again the supply of gas amounting 60 MMSCFD from Santos,? he said.

?In this way, PGN?s loss can be lowered to around US$400,000 per day or US$2.8 million at the maximum,? he added.

Sutikno explained that the explosion at the EJGP that occurred on Wednesday at around 8:30 p.m. has led to the temporary suspension of the transmission of 80 MMSCFD from Santos, forcing PGN to reduce its gas supply of 123.5 MMSCFD to East Java to 55 MMSCFD coming from Kodeco and Lapindo Brantas (Wunut field) which are unaffected by the explosion.

Currently, the gas flow has been under control as the line valve ORF owned by Pertamina and its line valve in Sidoardjo have already been closed.

He said that the EJGP pipeline transmits natural gas from PGN amounting to 80 MMSCFD from Santos and 50 MMSCFD from Energy Mega Persada (EMP) to Petrokimia Gresik.

Meanwhile, the explosion has reportedly left seven people dead and 13 others wounded and three others declared missing.

The dead victims include three military personnel who were on duty to control the embankment when the explosion occurred.

The victims who suffered from burning wound are now being treated at hospitals nearby - Polisi Bhayangkara Hospital, Sidoardjo Hospital and Dr. Sutomo Hospital

The cause of the explosion is now under investigation. (godang)