Investigators found that an oil leak from the pipeline of Lanzhou Petrochemical - a subsidiary of China National Petroleum Company - contaminated tap water with excessive levels of benzene in Lanzhou city, state-run Xinhua news agency reported today.
Tests from Thursday evening to early yesterday morning found between 118 micrograms and 200 micrograms of benzene per litre at Lanzhou's water plant, the report said.
The benzene levels were far in excess of the 10 micrograms per litre national limit.
Crude oil were found in soil along a duct between two water works owned by Veolia Water, a joint Sino-French venture and the sole water supplier for urban Lanzhou.
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"The channel has been carrying water to Veolia Water's No 1 and No 2 plants for decades. Under this ditch lies Lanzhou Petrochemical's oil pipeline," Yan told Xinhua.
He said repairs were underway to contain the damage.
Yesterday, over 2.4 million residents Gansu province were asked not to drink tap water following the detection of the toxic compound.
Benzene, a colourless carcinogenic compound used to manufacture plastics, is known to damage human hematopoietic system, which generates blood.
This is the second incident of its kind in Lanzhou in two months.
On March 6, residents reported a strange odour when they turned on their taps, which was later confirmed to be a high concentration of ammonia, but still within the limits of the national standard.