UpdateSichuan quake magnitude upped to 8.0

19 May 2008 06:03  [Source: ICIS news]

(Recasts lead and updates throughout)


SINGAPORE  (ICIS news)—A week after a massive earthquake shook Sichuan, the China Seismological Bureau raised the magnitude of the disaster to 8.0 on the Richter scale from 7.8 previously, media reports said on Monday.


China declared official mourning and suspended the Olympic torch relay for three days as a mark of respect for the victims as aftershocks continue to batter the area, hampering relief efforts and business restarts.


The area has suffered at least 24 aftershocks of 5.0 or above on the Richter scale since Monday's quake, the reports added. Sunday's aftershock, with a magnitude of 6.0, shook some of the worst-hit parts of Sichuan, killing at least three people in the town of Jiangyou, reports said.


As of 1400 local time on Sunday (0600 GMT), the official death toll stood at 32,477 but experts estimate the eventual total to exceed 50,000.


Apart from the heavy human cost, the financial cost of the quake was estimated at a staggering $20bn, according to consulting firm Air Worldwide. It was not clear if the estimates included the cost of interruptions in oilfield operations.


“Overall, when all the dust has settled, I would estimate a total damage not exceeding CNY3bn ($420m) for PetroChina and CNY2bn for Sinopec, roughly 2% and 5% of their overall 2008 profit estimates,” Gordon Kwan, Head of China Energy at CLSA said on Monday.


There has been no damage to subsurface oil/gas reserves although there are temporary intermittent interruptions to oil/gas production in the region, he said, adding that 908 petrol stations, 47 oil tanks and 71 oil/gas pipelines were damaged so far, at an estimate of Rmb1.78bn in losses.


The human suffering, meanwhile, continued to attract worldwide attention but is not expected to ease anytime soon. China’s meteorological centre has predicted rains later this week in the area, warning of possible landslides.


The focus of the relief effort has begun to shift towards providing food, medical care and shelter for the millions of people affected by the quake.


Reports said that two US military planes packed with food, power generators and other goods flew into the province, adding to the foreign help that was already there. Rescue experts from Japan, Russia, Singapore and South Korea as well as Taiwan and Hong Kong were already helping with the rescue effort.


China, which has not sought foreign help in natural disasters previously, had also despatched 135,000 troops and medics of its own to lead the relief effort.


Its Disease Prevention and Control Centre has been mobilised and over 144 medical personnel have been despatched to guide health and epidemic work at the quake-stricken area.


The earthquake also damaged 391 dams, which were currently being inspected amid fears of floods as a result of landslides.

More than 2,000 troops were sent to work on the Zipingpu dam, which is situation upstream from the badly damaged city of Dujiangyan as concerns mount on possible cracks and floodings.


However, the Ministry of Water Resources announced in a statement on Thursday that the dam together with two other major dams were structurally safe.


The Three Gorges Dam build to withstand Earthquakes of up to 7 on the Richter scale apparently escaped unscathed in the wake of the quake.


The province's chemicals industry has been hit hard by the disaster, which has led to major production and logistics problems. Nine out of the remaining 10 firms among the 66 suspended from trading on the Shanghai Stock Exchange issued statements on Friday detailing the damage.


The quake also affected the markets.


Two fertilizer plants collapsed on Monday and numerous shutdowns have been reported.


PetroChina said its operations had been disrupted and it may now scrap plans to build a new 800,000 tonne/year ethylene cracker in Chengdu.


Its subsidiary Nanchong refinery has restarted its crude distillation unit (CDU) and some other units producing solvent oil, baseoils and paraffin would resume soon, a company source said.


On Thursday, three dimethyl ether (DME) producers said they had resumed normal production but were still being affected by logistics problems.


Melamine buyers said they were braced for a huge spike in third quarter prices due to reduced urea supply.


Meanwhile, trucks carrying 200 tonnes of toluene di-isocyanates (TDI) have been stranded since Monday on a major road in the northeast of Sichuan, a local logistics company source said.


With additional reporting by Gabriela Wheeler, Ng Hun Wei, Chow Bee Lin, Prema Viswanathan, Helen Lee, Peh Soo Hwee, Anu Agarwal, Hong Chou Hui, Bohan Loh, Dolly Wu and Brian Myung


Have you personally or your business been impacted by the earthquake in China? If you have any information or thoughts you would like to share, post your comments or photos on the ICIS China Earthquake forum. You can also send photos and video directly to us at icisnews.asia@icis.com or icisnews.europe@icis.com

By: Cheang Chee Yew
+65 6780 4359

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