The company spent millions of dollars replacing pipeline in the San Bruno area in 1993 and 1994. But the work was halted 300 yards from line 132 in San Bruno, the San Jose Mercury News reported.
Eight people were killed and 38 houses destroyed by the blast in September. The explosion is one of the worst involving natural gas in U.S. history.
PG&E's decision was based on a report from its own geological engineers in 1992, the newspaper said.
"Most of line 132 does not need to be replaced at this time, as it was installed using welding methods that meet current standards," the report in November 1992 from the geosciences department said.
Federal investigators reported in January that the line had 150 welding defects, which had apparently been there since it was installed.
"It's heartbreaking. Eight lives were lost and many others were injured," said U.S. Rep. Jackie Speier, D-Calif. "What we see here is a pattern where PG&E has made decisions not to put safety first. At some point in their history they shifted from safety first to expedience first. Where can we trim a budget? Where can we reduce a cost?"