A deadly oil pipe explosion killing at least 47 people in eastern China has caused China’s shares to drop on Monday, following a 4 per cent slip in share-prices of the exploded oil-line operator Sinopec.
The incident, first reported on Friday evening, has knocked out crude oil pipe lines around Qingdao, in the east-Chinese Shandong Province, as the government of China ordered the pipelines to be inspected.
Qingdao is one of China's largest crude oil import terminals, supplying crude oil to two major Sinopec refineries - the Qingdao plant and Sinopec Qilu Petrochemical Corp. Both refineries have had their crude oil supplies cut off after the disaster, forcing them to switch to oil reserves to keep operations going.
According to Chinese state news agency Xinhua, the leaking pipeline has been in use since July 1986, with an annual oil transfer capacity of 10 million tonnes. It measures 71.1cm (28 in) in diameter and is about 250km (154 miles) long.
After the explosion the Huangdao oil terminal in Qingdao stopped operations, ship brokers and a port official said on Friday. The local government said oil had spilled into the port, which had also caught fire, but a port official said the port had not been affected.
The disaster appeared to be Sinopec's deadliest and was one of the worst industrial disasters in China this year. In June, a fire at a poultry factory in the northeast killed 121 people.
According to available information, the Qilu refinery, processing about 220,000 barrels per day, has not stopped refining nor reduced production but it was now drawing down its crude inventories, which will last about four to five days.
There was no information available regarding the situation at the second Sinopec-owned refinery Qingdao.
The explosion comes as authorities scrutinise possible corruption at China's leading oil companies. Former head of China National Petroleum Company, Jiang Jiemin, and other senior officials at Petrochina were placed under investigation in September.
Sinopec Chairman Fu Chengyu apologised to the people of Qingdao during a visit to the scene, the company's Weibo microblog said on Saturday.
"(We) will do whatever it takes to go all out in rescue, relief and rehabilitation work, coordinating with the State Council incident investigation group to find the cause," it said.
President Xi Jinping called on local authorities to "spare no effort to rescue the injured and strengthen safety to eradicate such incidents", state news agency Xinhua said.