Dalian Port shut after an offshore pipeline explosion triggers major oil spill

20-Jul-10

One of China's largest ports - Dalian, has been shut after an offshore pipeline explosion triggered a major oil spill. This will add to pressure for stricter environmental standards in China, already reeling from a toxic copper mine leak in the south. The blaze began on Friday when two pipelines exploded as crude oil was being off-loaded from the Cosmic Jewel, a Liberian-registered ship chartered by PetroChina. After 15 hours of fire fighting, about 1,500 tons of oil had spilled into the sea, causing a 183 sq km (71 sq mile) slick, 50 sq km of which was "severe". The port could be closed for 7-10 days. The shutdown has forced a refinery to reduce processing and importers to divert cargoes and could disrupt shipments of oil, iron ore and soy. 6 more Very Large Crude Carriers (VLCCs) with 12 mln barrels of crude oil are set to be diverted possibly to South Korea or other VLCC terminals in China. The Xingang oil port is home to a 19 mln barrel strategic petroleum reserve facility, as well as commercial storage run by CNPC and PetroChina that may be even bigger. It is also a transfer spot for two major refineries, Dalian Petrochemical Corp and WEPEC, both operated by PetroChina with a combined processing capacity of 600,000 bpd. PetroChina has started trimming refinery operations at the 200,000 bpd WEPEC, by "several thousand tons" per day.