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Pertamina closes pipeline after large-scale illegal tapping

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Hydrocarbon Engineering,

Indianesian state-backed oil and gas company PT Pertamina has closed down its Tempino-Plaju pipeline in Sumatra amid mounting illegal tapping, just a week after the revamped facility began operations.

The 260 km restored pipeline delivers crude oil from oil wells in Jambi province to Pertamina’s Plaju refinery in Palembang, South Sumatra and is worth US$ 90 million in investment.

Pipeline asset is target

Despite being planted at a depth of 1.5 - 2 m below ground level, the pipeline, which has a capacity of 24 000 bpd of crude oil, remains the target of oil theft, according to Pertamina spokesman Ali Mundakir.

“[The new pipeline] has become the object of looting through a large, well-organised illegal tapping operation. Average losses thanks to the oil theft are up 18% from the 12 000 bpd of oil delivered,” he said on Thursday 26th July.

Pipeline was recently renovated

The Tempino-Plaju pipeline, operated by Pertamina’s subsidiary PT Pertagas, was renovated by the corporation following an explosion that killed nine people in October 2012 during an oil theft attempt.

Prior to the explosion, the pipeline was already in “terrible condition” due to illegal tapping.

The new pipeline commissioned its operations in eight days, beginning 8th July, almost without any theft attempts. This, according to Ali, prompted Pertamina to begin commercial operations on Wednesday 17th July.

“However, once we began commercial operations, the losses continued to increase. In just a week after the operations began, the losses reached 17 500 barrels of crude oil, equaling Rs. 17.5 billion [US$ 1.7 million],” the spokesman said.

Losses of Rs. 280 billion through tapping this year

Overall, since January this year, the state-owned energy company suffered losses worth Rs. 280 billion amid mounting oil theft through illegal tapping.

Operator ceases oil pumping in response

In response to the escalation of oil theft, Pertagas, as the operator of the pipeline, has ceased oil pumping activities at the facility, which could reduce oil production from the oil wells in Jambi such as Tempino and Bajabang, Ali said.

While such a move might reduce the gasoline supply in the southern part of Sumatra, including big cities such as Palembang, Jambi and Bengkulu, the spokesman said the move was necessary to avoid further losses.

“This is an emergency situation. If we continue to pump the oil then it will be pointless because the oil will not reach its final destination as it will be stolen on its way to the refinery,” said Ali.

Individuals within Indonesia’s security establishment are reported to have had played a role behind the large-scale illegal tapping. Last year, the Co-ordinating Political, Legal and Security Affairs Minister Djoko Suyanto acknowledged the alleged involvement of law enforcement officers in oil theft.

Edited from various sources by Elizabeth Corner

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