Sinopec reshuffles refineries, diverts tankers after blast

Mon Nov 25, 2013 8:54am EST
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By Judy Hua and Chen Aizhu

BEIJING (Reuters) - Asia's top oil refiner Sinopec (0386.HK: Quote)(600028.SS: Quote) has cut production for at least two of its refineries in China's eastern Shandong province after the pipeline blast which killed 55 people on Friday, industry sources said.

The adjustments are part of a juggling of oil refining operations across its plants after the disaster, which has sparked a public backlash and an apology from Sinopec, saying it will conduct safety checks on all its more than 30,000 km of pipelines.

Oil traders also expected Sinopec to cut back on crude purchases while a backlog of tankers outside one port clears.

The firm has reduced production at its Qingdao refinery, which has a capacity of 200,000 barrels per day and has also trimmed back on lubricant output at the Jinan refinery, even though gasoline and diesel production at the plant remains unaffected, industry sources said.

It was not clear how much production Sinopec cut at both plants. The company said in a statement to the stock exchange on Monday that its refining operations were normal and oil supply was stable.

"Production has been cut but not on a big scale," said one of the sources with direct knowledge of the refinery operations.

The blast at Qingdao port on Friday was China Petroleum & Chemical Corp's, also known as Sinopec, deadliest accident and is one of the worst publicly reported industrial disasters in China this year.

Chinese President Xi Jinping visited the city to examine rescue efforts, met victims and ordered to launch a broad safety checks on oil and gas pipeline network, Xinhua reported.   Continued...

A Sinopec sign displayed at its gas station is seen behind a Chinese New Year lantern installation in Hong Kong February 5, 2013. REUTERS/Bobby Yip