The blast took place on Friday in Huangdao district of Qingdao when workers were trying to plug a leak after oil from the state-owned pipeline flowed into the municipal pipe network, state-run Xinhua news agency reported.
The 176-km pipeline is run by the state-owned Sinopec, China's largest oil refiner, and links oil depots in Huangdao with Weifang city, home to a few petrochemical plants.
Some of the oil had spilled into Jiaozhou Bay through the rainwater pipeline, and about 3,000 square meters of sea water was polluted by oil, said the rescue headquarters.
The series of explosions left cracks in the streets, the longest of which was about 1.5 km.
Fires and explosions also occurred on the polluted sea waters at the entrance to the bay, the report said.

Environmental monitoring showed that the concentration of toxic materials in the air was below the national standard. Snopec chairman Fu Chengyu apologized for the explosion.
In a statement issued on Saturday, Fu said he feels greatly grieved to see the huge losses of life and property, and expressed deep condolences to the victims.
He apologized to people of Qingdao and the country. He said Sinopec will conduct rescue work at all costs and cooperate with the investigation team dispatched by the Central Government to investigate the incident.
A total of 18,000 people have been evacuated from the areas of the blasts. Water, gas and electricity were cut off in parts of the district after the blast.
The local government distributed 40,000 servings of free food for breakfast and lunch for those affected, state media reported.
The pipeline, with a total investment of 1.3 billion yuan (USD 211.8 million) was put into operation this August. It has an annual transportation capacity of 15 million tonnes.


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