The company will invest up to $90m in the construction work mainly to reduce the attempts of oil theft which is suspected to have resulted in the recent fatal pipeline explosion that claimed eight lives.

Pertamina corporate communications vice president Ali Mundakir was quoted by The Jakarta Globe as saying that the new pipeline will be installed two meters under the ground.

"The investment is at $90 million. … It was not calculated based on the economic perspective, but more for security," Mundakir said.

Pertamina Gas, subsidiary of Pertamina, will build the new pipeline which will have an increased capacity to transport 15,000 barrels of oil per day.

The company is also planning to increase the security staff to patrol the pipeline and minimize oil stealing incidents.

Pertamina is expecting to complete the construction of the new pipeline in 2012 and start operating it in early 2013.

The company has lost over 17% of crude oil from its Tempino- Plaju pipeline from January to 17 September 2012 due to the oil stealing incidents, according to State Enterprises Minister Dahlan Iskan.