Sinopec cuts bitumen output on Qingdao pipeline blast

26 November 2013 06:59 Source:ICIS News

SINGAPORE (ICIS)--Sinopec has cut bitumen production in Shandong province following a fatal rainwater pipeline blast in Qingdao on 22 November caused by oil leakages from its Dongying-Huangdao oil pipeline, company sources said on Tuesday.

Sinopec has reduced utilisation rates at five of its refineries by 10-33% as operation of the oil pipeline has been suspended by the incident.

The deadly incident had killed 55 and injured 166 people, with nine others missing, according to media accounts.

Sinopec has three bitumen producers in Shandong, including Sinopec Ji’nan, Sinopec Qilu and Sinopec Qingdao Refining.

Affected by the accident, Sinopec Ji’nan halted bitumen production on 23 November and may not resume bitumen production in the rest of the year, according to a company source. The company can produce 100,000 tonnes of bitumen each year.

Sinopec Qilu, with a bitumen capacity of 500,000-600,000 tonnes/year, may halt bitumen production from 27 November when it runs out of crude, a company source said, adding that it is unclear when it will resume production.

However, Sinopec Qilu has already produced enough bitumen for this month, according to the source.

Sinopec Qingdao Refining, which usually produces 10,000 tonnes of bitumen each month, has basically completed its output target for November, a company source said.

Whether its December production will be affected, however, remains uncertain because it has not finalised its December production schedule yet, according to the source.

Sinopec Qilu and Sinopec Ji’nan produced 786,000 tonnes of bitumen in 2012, which made up 29% of the total output in Shandong, according to data compiled by C1 Energy, an ICIS service in China.

By Menghua Chen