It was a nightmare for Qingdao residents as explosions following high intensity flames burst out from the ground damaging buildings and turning over vehicles.
At least 35 people were killed and over 166 injured in the mishap, state-run CCTV reported.
Among the injured, 65 are in serious conditions, Qingdao municipal health bureau said in its latest statement.
Oil leaked from the Sinopec pipeline into the municipal pipe network, which caused the explosion, according to an initial investigation by the rescue headquarters at the scene.
About 1,000 square meters of road surface was covered in leaked oil at Zhaitangdao Road.
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, state-run Xinhua news agency reported.
"I have only seen this in disaster films," said a rescuer surnamed Xue, who drove past the streets where the blast happened.
Xue said he was astonished by the sight of a bus sandwiched between huge cracks in the street with passengers trapped inside.
Fires and explosions also occurred on the polluted sea waters at the entrance to the bay, according to the headquarters.
An oil belt with a width of two to three meters could be seen in waters around the site of the explosion.
No new oil leakage from the pipeline had been found.
The district government has ruled out a terror attack as the cause, while the State Administration of Work Safety has sent a work team to the scene to guide the rescue efforts.
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