An explosion in eastern China has killed at least 35 people and contaminated seawater when leaked oil from a ruptured pipeline ignited as workers cleaned up the spill, local authorities said.

The pipeline, owned by Sinopec, China's largest oil refiner, was leaking onto a city street in Qingdao, Shangdong province and into the sea for about 15 minutes before it was shut off on Friday. Hours later, at 10:30am (0230GMT), the leaked oil caught fire and exploded in two locations.

One blast went off at a major road junction in the city, formerly known as Tsingtao, and photos posted online showed shattered concrete slabs and human corpses scattered across the street. Black smoke rose above gigantic fuel silos and darkened much of the sky.

"We will investigate the incident with responsibility and give timely reports," said a Sinopec spokesman.

The Qingdao Environmental Protection Bureau said barriers had been set up to contain the oil as it spread into the sea, but that a mixture of gas and oil from a storm sewer exploded and caught fire over the sea.

More than 3,000 square metres (32,000 square feet) of sea surface had become contaminated, the city government said. Ship brokers said Qingdao oil terminal, one of the country's largest crude import terminals, had stopped operations.

Officials said the oil had seeped into underground utility pipes, but assured the public that the blasts did not affect any petrochemical plant or military facilities in the seaside district and that air quality remained good after the disaster.

With the price of oil ever volatile, initial reports suggested the Asia-Pacific crude market was holding steady on Friday, with little activity for January loading cargoes.

Meanwhile, several oil tankers are held up waiting to enter Qingdao port to discharge their loads. The Freightview shipping management company has said the following vessels are waiting:

Tanker name  Quantity of oil  Oil type  Origin 
 Maersk Hojo  270,000 barrels  Crude  West Africa
 New Success  270,000 barrels  Crude  Middle East
 Front Falcon  135,000 barrels  Crude  Brazil
 Genmar Poseidon  162,000 barrels  Crude  Americas
 Alsace  160,000 barrels  Fuel oil  Info not available

Source: Al Jazeera and agencies