The accident happened at around 10:30 am (1300 IST) in Huangdao district when workers were repairing a leaking petroleum pipeline, the Qingdao government's information office said. (Agencies)
At least 35 people were killed and over 130 injured in the mishap, state-run CCTV reported.
The injured are being treated at local hospitals, state-run Xinhua news agency reported. Oil supply through the pipeline was stopped in the early hours.
The fire has been put out, and barricades have been set up to stop the oil from entering the sea, the Qingdao municipal environmental protection bureau said.
The 176-km pipeline, which links oil depots in Huangdao to Weifang city, home to a few petrochemical plants, is owned by state-run Sinopec, China's largest oil refiner.
Pieces of cement and debris were scattered around the explosion site, which is close to the coast. An oil belt with a length of two to three meters could be seen in waters around the explosion spot.
The cause of the accident is being investigated. Photographs posted on Sina Weibo showed the blast caused a large trench on the ground and that car windows nearby were shattered.
China has a poor record on industrial safety as lax law enforcement leads to low safety standards.
Around 28,000 people were killed or went missing in workplace accidents in the first half of this year, state media have reported.
The accident happened at around 10:30 am (1300 IST) in Huangdao district when workers were repairing a leaking petroleum pipeline, the Qingdao government's information office said.