PGN?s unit to spend $84m to repair pipeline buckle

PT Transgasindo, a subsidiary of state owned gas distribution company PT Perusahaan Negara (PGN), will spend about US$84 million to repair the pipeline that channels gas from South Sumatra to Singapore.

?The whole work is expected to be completed in the first quarter of 2009 with an estimated cost of about $84 million. The cost will be covered by Transgasindo using internal funds and commercial loan,? PGN?s Corporate Secretary Heri Yusup said in a statement to Petromindo.com on Wednesday.

PGN confirmed in December last year that there was a problem with the buckle at the offshore Kuala Tungkal-Panaran section of the pipeline. The firm however denied reports that there were cracks on the pipeline.

The firm said the ?problem? had forced it to lower its gas supply volume via the pipeline which started operation on Sept. 10, 2003.

Heri explained that Transgasindo, along with PT Denvegraha (DNV), had carried ?Fitness For Services? (FFS) and ?Engineering Critical Assessment? (ECA) studies to solve the problem. Based on the studies, the DN recommended Transgasindo operate the pipeline with a maximum pressure of 860 psig with a maximum volume of 400 MMCFD. The consultant also recommended the firm fix the pipeline using either ?Repair by Clamps? or ?Cut and Replace? methods.

Based on recommendation from engineering consultant Worley Parsons Indonesia and to ensure the continuity of gas supplies during the repairing process, Transgasindo decided to repair the pipeline using ?Cut and Replace with Zero Down Time? method.

Heri said materials for the repair works were now in the process of fabrication and Transgasindo had appointed ?Project Management Contractor? (PMC).

?PMC is preparing tender documents for Engineerring Procurement Construction Contractor (EPCC). The EPCC contractor is expected to be appointed this year,? Heri said.

The 476-km Grissik-Singapore pipeline is operated by Transgasindo, which is 60 percent owned by PGN and 40 percent by Transasia Pipeline Pvt. Ltd (Transasia). Transasia consists Conoco Indonesia Holding Ltd., Petronas International Corporation Ltd., Talisman Transgasindo Ltd. dan SPC Indo-Pipeline Co. Ltd. (Bodega).