Sinopec shuts down Operation after Gas Pipeline Explosion

Bloomberg – China Petrochemical Corp. has shut some natural gas operations in central China after a landslide caused a pipeline fire Wednesday that killed two people.

A pipeline carrying natural gas from Sichuan province in western China to the eastern part of the country cracked and caught fire near Enshi city in China’s Hubei province around 6:25 a.m. local time after heavy rainfall caused a landslide, according to a microblog post by the company. The fire was contained and the company is halting some local supply after the incident.

Flooding along China’s Yangtze River this summer has killed at least 186 people as of July 4, according to the civil affairs ministry. The nation has maintained an emergency alert at the second-highest level as storms stretching nearly 1,000 miles (1,600 km) move across central and southern China.

“Enshi is on the trunk line of Sinopec’s West-East gas pipeline, so supplies to downstream users particularly in eastern regions like Jiangsu, Zhejiang and Shanghai will be affected,” Liu Guangbin, an analyst with Shandong-based SCI International, said by phone. “But summer is not a peak season for gas use, so I don’t think it will cause any significant tightness in local markets.”

Segments of the affected pipeline have been shut as of 1:02 p.m. and Sinopec is coordinating with PetroChina Co. to offer 5 MMcmgd of supply for residential customers, according to a separate microblog post. Sinopec has cut 9.8 MMcmgd of supply to industrial users. The pipeline will likely be restored within two weeks and the affected users have other sources for gas supply including PetroChina’s pipelines, offshore gas fields and imports through LNG terminals, Liu said.

Sinopec started operating its Sichuan to eastern China gas pipeline linking with Puguang gas field in 2010. It can transport as much as 12 Bcm a year. The company invested 63 billion yuan ($9.4 billion) to build the 2,170-km line, according to state-controlled People’s Daily.

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