A further 136 people were injured in the blast which rocked the oil pipeline in the eastern port city of Qingdao.
Chinese state-owned refinery giant Sinopec has apologised for the incident, the cause of which is yet to be confirmed.
Leaked oil from the pipeline is thought to have ignited, causing the explosion. The resultant fire was extinguished at around 1pm local time.
Operations at the Qingdao port oil terminal were halted as a result.
The original estimate of 22 dead was soon revised to 35 with reports saying 166 have been injured.
An investigation into the cause of the incident is ongoing.
Sinopec said in a statement: “We are deeply sorry for what has happened in Qingdao and express our sincere condolences to the victims and their families.
“We will investigate the cause of the accident with a responsible manner and keep the public posted on our progress.”
Reuters reported on Friday that Sinopec has halted crude and oil product trading after the explosion.
“(Sinopec trading arm) Unipec is out of the market today because of the pipeline blast,” the news wire quoted one unidentified trader as saying.