Corporate ESG: deadly China gas explosion pushes industry’s safety and governance standards up the agenda amid stock sell-off
- At least 25 people were killed and more than 100 injured when a gas pipe exploded in a market in Shiyan in central Hubei province
- Xi Jinping has ordered local government leaders to launch thorough inspections of chemical storage facilities and oil and gas pipe networks
China’s natural gas distributors are expected to step up inspection of industry-wide facilities following a deadly explosion this week, pushing safety issues, operational risks andcorporate governance to the forefront of the state agenda.
At least 25 people were killed and more than 100 injured when a gas pipe exploded in a market in Shiyan in central Hubei province on Sunday, prompting President Xi Jinping to order officials to “stay vigilant and politically sensitive” in preventing major safety hazards.
Xi also ordered local government officials responsible for safety matters to conduct thorough inspections of chemical storage facilities, chemical parks, oil and gas pipe networks in densely-populated areas and mines. He also called for installation of real-time online monitoring systems.
Investors on Tuesday dumped shares in China Gas Holdings, which listed Shiyan city and Shiyan Wudangshan zone in Hubei in its annual report as locations where it has operations. It held concession rights to 604 gas pipeline projects in mainland China as of the end of March. Its shares rebounded 1 per cent to HK$25.55 on Wednesday.
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At least 12 killed, more than 130 injured in a gas explosion at central China market
“If the incident is confirmed to have been caused by a corroded underground pipeline, we believe all city-gas distributors, especially China Gas, should provide an actionable, concrete and quantifiable timeline on the switch to [plastic] pipelines as well as transparent disclosure, as suggested by the SASB model,” Daiwa Capital Markets analysts Dennis Ip and Leo Ho wrote in a report on Monday.
