Taiwan Probes Potential Pipeline Leak after Gas Explosions Kill 28 People

By Adela Lin | August 4, 2014

Taiwan authorities are preparing to inspect thousands of miles of pipeline after the government blamed the island’s deadliest industrial accident on a chemicals company. Shares of petrochemicals declined.

Preliminary investigations indicated that seepage from LCY Chemical Corp.’s system may have caused explosions that killed at least 28 people in Taiwan’s second-biggest city of Kaohsiung. President Ma Ying-jeou, who on Aug. 2 visited hospitalized victims and the families of the dead, called for a thorough probe and a review of underground pipelines.

At least 305 people were injured in explosions just before midnight on July 31. Major city thoroughfares caved in, forming 2-meter (6.6 feet) deep ditches, as cars were hurtled through the air. Four policemen and fire fighters were killed and more than 4 kilometers [21/2 miles] of city roads were destroyed, Kaohsiung’s government said today.

“The central government will help local branches build a thorough data bank to serve as base for safety checks in the future,” said Woody Duh, deputy minister of economic affairs, who called the incident’s the island’s worst industrial accident. Authorities will begin by compiling information on the locations and lengths of various underground lines.

Leaked Propylene
LCY Chemical tumbled by 6.9 percent to NT$21.65 [$0.72], falling by the daily trading limit to close at the lowest in more than five years.

The southern port city estimated road reconstruction costs would amount to NT$1.91 billion ($63.7 million), according to a statement today. The blasts affected 32,968 households and 83,819 people, cutting gas supplies to about 23,600 households, Taiwan’s central government said.

To help with disaster relief, Foxconn Technology Group donated thousands of portable power packs and its Chairman Terry Gou donated NT$10 million [$333,361], the company said. Asustek Computer Inc., Cathay Financial Holding Co. and Quanta Computer Inc. each donated NT$10 million. JPMorgan Chase & Co. donated NT$3 million [$100,000] and planned to match employee contributions.

Kaohsiung officials pinned responsibility for the disaster on chemicals maker LCY Chemical, which uses gas piped under the city. A line channeling propylene between China General Terminal & Distribution Corp. and the company’s facilities showed a drop in pressure at 8:43 p.m. on July 31, the city government said in a statement.

LCY Chemical didn’t ask China General to stop delivery immediately nor did it report the readings to the environmental protection bureau, allowing a large amount of propylene to leak for three hours, Kaohsiung said.

Shut Pipelines
Chairman Bowei Lee said at a press briefing yesterday LCY Chemical was unable to comment before prosecutors release reports. “We want to know what happened more than anyone,” Lee said in a briefing carried by Next TV, without saying whether the company had a role in the leaks.

The municipal government ordered four petrochemical pipelines running through the area to be shut down while the investigation is carried out, according to Duh. As a precaution, China Petrochemical Development Corp. removed 260 metric tons of propylene from underground, Vice President Jason Yu said by phone.

Operations at Asia Polymer Corp. and USI Corp., both shareholders of China General Terminal, were normal as only the systems in blast areas were halted, the companies said in stock- exchange filings on Aug. 2.

Asia Polymer and USI both fell by daily limit. The Taiwan Taiex Chemical Industry Index lost 2.5 percent, while Taiwan’s benchmark Taiex index rose 0.7 percent. China Petrochemical Development dropped 6.6 percent to the lowest in more than four years.

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