Bloomberg News

PetroChina, Yanchang Pipelines Shut After Landslide Damage (1)

July 16, 2013

PetroChina Co. (857) and Shaanxi Yanchang Petroleum Group Co.’s units in Yanan city, Shaanxi Province, have been shut by the local government after landslides damaged oil pipelines and polluted drinking water.

Both companies’ oil and gas pipelines, oil wells and storage facilities near Wangyao Reservoir in Yanan’s Zhidan county have been shut after crude oil leaked into the water supply, the Yanan government said on its website today. The reservoir provides drinking water for more than 200,000 residents in the city, it said.

The companies “must carefully inspect their pipelines, making sure no oil leak will happen again,” Yanan Mayor Liang Hongxian said yesterday, according to the website.

China’s authorities are becoming more responsive to environmental and health concerns, as the new leadership under President Xi Jinping and Premier Li Keqiang try to establish an image of a government for the people, said Willy Wo-Lap Lam, an adjunct professor for history at the Chinese University of Hong Kong.

“They want to react to environmental and health issues more swiftly, so people don’t have to take to the streets to have their voices heard,” Lam said. “This is a more of a conciliatory approach compared with what they did in the last government.”

Protests in the southern city of Heshan last week forced local government to abandon plans for a uranium-processing facility, while demonstrations in Shanghai in May forced battery maker Shanghai Guoxuan New Energy Co. to ditch plans for a factory there.

Water Tested

Water from the Wangyao Reservoir is safe to drink, Yanan environmental officials said after testing its quality on July 14, Shaanxi-based Hua Shang News reported today, without providing details.

Yanan, a major natural gas and crude oil production area for PetroChina’s Changqing oilfield, has seen once-in-a-century rains since July 3, Yanan’s official news website ya123.com reported. The rainfall killed at least 26 people, injured 118 and caused direct economic losses of 1.57 billion yuan ($256 million), according to a statement on the website.

Changqing is PetroChina’s biggest field in China, producing about 50 million metric tons of oil and gas a year. The company sent more than 300 people to repair a pipeline that was damaged by landslides on July 12, Hua Shang News reported. Local government sent 1,500 people to assist the effort, it said.

Pipeline Repair

The newspaper said 1.4 tons of oil leaked, polluting the Wangyao Reservoir. The pipeline leaked for a second time yesterday after a landslide upstream of the reservoir, it reported.

Yanchang spilled about 13 tons of oil upstream of the reservoir on July 12 and the company has managed to repair the pipeline and clean-up most of the leak, according to a statement from the company’s unit, Yanchang Petroleum Group Pipeline Co.

PetroChina is trying to contact its local unit for more details, Beijing-based spokesman Mao Zefeng said by phone yesterday. Mao did not answer two calls to his office seeking comment today.

Yanan had a population of 2.18 million in 2010, according to the Shaanxi government-sponsored website sxpop.gov.cn.

In November 2011, China National Petroleum Corp., the parent of PetroChina, was given a disciplinary warning by the central government for an accident the previous year, after an oil spill caused by an explosion polluted more than 183 square kilometers (71 square miles) off the coast.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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