Another 136 injured people in the accident which ripped open a busy road yesterday causing extensive damage and destruction all around.
All the injured have been hospitalised with condition of several people was stated to be serious.
The blast took place 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.
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, Xinhua reported.
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.
The local government has told citizens to remain calm.
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.
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.
Snopec chairman Fu Chengyu apologised for the explosion.
In a statement issued today, Fu said he feels greatly grieved to see the huge losses of life and property, and expressed deep condolences to the victims.
He apologised 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.