China has closed the Dalian Xingang oil port in its northeast, home to the country’s largest oil reserve bases, after crude pipeline explosions spilled oil into the sea, but the main facilities there are undamaged.
State oil major PetroChina, which operates two major refineries in Dalian, has set up a contingency plan to cope with one week’s closure of the main oil port that receives foreign crude vessels regularly and is also a main export point for gasoline and diesel.
PetroChina has started trimming refinery operations at one of the plants, the 200,000 barrel-per-day (bpd) West Pacific PetroChemical Corp, by about “several thousand tonnes” per day.
PHOTO: EPA
“The port was sealed right after the explosion. We have a one-week contingency plan, but are hoping that the oil spill can be cleaned up as soon as possibly,” the oil executive said.
In a statement to the Hong Kong stock exchange, the company said the accident had not caused any direct damage to the oil terminal’s main facilities, the impact being limited to ancillary facilities such as control systems.
“The magnitude of the damages and losses caused by the accident and its impact on the operations of the Group and Dalian Petro China Warehousing remain to be further assessed,” it said.
Maritime safety authorities are battling to contain a 50km² oil slick triggered by the explosions, state media reported yesterday.
The oil executive said contamination on about 10km² of sea area was “quite serious.”
Hundreds of firefighters battled for more than 15 hours to extinguish the blaze that started late on Friday when a pipe transporting crude oil from a ship to a storage tank blew up, causing a second pipeline nearby to explode.
The China Daily said the blast occured when a Liberian-flagged tanker was off-loading oil.
The cause of the blast is under investigation.
However, RBS oil analyst David Johnson said the cost would not be significant for PetroChina’s state-owned parent China National Petroleum Corp, at an estimated US$50 million.
“It’s not going to be a major cost in the big scheme of things. It’s going to be in the tens of millions of dollars, not tens of billions of dollars,” he said.
“The question is, who owns the oil in the tanker and whether the oil is insured. But some of them will have to pay the clean-up costs,” Johnson said.
“The question is, who’s going to be liable? It’s like the BP story — whose fault is it?” he said.
He said the oil spill could lead to tighter rules and regulations on the oil industry.
“Though the oil pipe blast in Dalian has caused serious damage to the environment, it is not comparable to the BP oil leak in the Gulf of Mexico,” Zhao Guojun (趙國軍), of the Shanghai Academy of Social Science’s Center for Studies on International Affairs, told the Global Times.
“Whether or not the blast was caused by inappropriate operations by foreign oil ships, the incident is controllable,” Zhao said.
There were no casualties, but state television said oil had contaminated the ocean off the port city in Liaoning Province.
Workers are using skimmers and dispersants to break up the oil slick and stop it spreading, the China Daily said.
The pollution is concentrated about 100km offshore, it said.
“By Sunday evening, about 7,000 meters of floating booms had been set up and at least 20 oil skimmers were working to clean the spill,” the newspaper quoted local officials as saying.
There are no residents within 3km of the affected site, and little “marine farming,” the report said.
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