Indonesia pipeline explosion linked with mud flow

SIDOARJO, Indonesia, Nov 23 (Reuters) An Indonesian gas pipeline explosion that killed at least seven people was related to a massive mud flow from underground which authorities have struggled for months to plug, an official said today.

The late yesterday explosion -- which disrupted gas operations in the area -- occurred near the city of Surabaya on Java island in a part of the state-owned Pertamina East Java Gas Pipeline.

Indonesian President Susilo Bambang Yudhoyono told reporters the cabinet's energy minister had gone to the scene and the government ''would take steps needed to ensure that the situation would not deteriorate further''.

The incident happened in the area where hot mud has been gushing from near the Banjar Panji exploratory gas well since the end of May following a drilling accident, inundating several villages and causing an environmental disaster.

''The soil layer in the centre of the Banjar Panji well, from where the hot mud constantly flows, subsided and then it curved.

Thus it pressed the 28-inch pipes which broke and the gas escaped into the air,'' Basuki Hadimulyono, head of the national team to tackle the mud flow, told Reuters.

''The constant hot mud flow that started on May 29 made the soil subside.'' The well is operated by Indonesia's Lapindo Brantas, a unit of PT Energi Mega Persada, partly owned by the Bakrie Group, which is controlled by the family of Indonesia's chief social welfare minister, Aburizal Bakrie.

The firm has denied the mud is directly linked to the drilling operation.

Bakrie has said he is not involved in group activities since becoming a government minister, and has endorsed the government view that Lapindo should be held responsible for the problems caused by the mud.

A Pertamina official said the cause of yesterday's accident was not known.

''We don't know exactly why the gas pipe exploded but the effect of the blast stopped gas distribution for Surabaya and Gersik,'' said Sukadi, Pertamina's gas transmission chief for East Java distribution.

(CRACKED PIPES) Win Hendrarso, chief of Sidoarjo regency near Surabaya, said dozens of people had been reported missing after yesterday's explosion. Eleven people were injured.

''So far, there are seven bodies that we have been able to get to up until the early hours yesterday. One of them cannot be identified after being burned beyond recognition,'' said Hadimulyono.

Officials said most of those killed by the accident, which occurred at around 1800 hrs, were military and other government personnel involved in trying to secure the mud flow.

Retno Rudi Novrianto, another official from the mud team, said it was likely the pipes cracked: ''Since the gas pipes are high pressure ones, it produced a big blast.'' More than 10,000 people have so far been displaced by the mud, gushing at a rate of 50,000 cubic metres a day from the well.

Experts say the mud leak could have been triggered by acrack about 6,000 feet deep inside an exploratory well drilling operation near Surabaya.

A Pertamina official said it would not have to import more diesel oil after a request from the state power firm for the fuel for use at power stations to make up for the lost gas.

Australian oil and gas firm Santos Ltd. said on Thursday that the Maleo gas project, in which Santos has a 67.5 per cent stake, shut in production after the explosion.

Maleo gas, along with gas from other fields in the area, is delivered into the East Java pipeline.

Santos' spokesman Christian Bennett said it was too early to determine the expected duration of the outage.

But the news sent Santos' shares down as much as 3.3per cent to a low of .80 Australian dollars, but they edged back to close at 11.00 Australlian dollars.

A PT Energi Mega unit shut down gas production at the Pagerungan field in the Kangean PSC late yesterday after the pipeline flow was disrupted, the company said in a statement.

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