At least six people including two children have died in an oil pipeline explosion sparked by a priest who mistook petrol for holy water in Nigeria.

Thick black smoke could be seen billowing into the air over Gloryland Estate in the Isheri Olofin neighbourhood on the outskirts of Lagos at around 8am on Thursday.

'The pastor picked a keg believing it contained water not knowing it was filled with petrol,' said Ibrahim Farinloye of the National Emergency Management Agency.

'In the process of emptying the contents on the man, a lit candle nearby sparked fire that engulfed both of them,' Farinloye told AFP.

Federal firefighters try to put out fire from a ruptured oil pipeline at Peace Estate, Baruwa at Ipaja district of Lagos, Nigeria's commercial capital, on Thursday

A firefighter carries a hose as he tries to extinguish a blaze in the Baruwa neighborhood on Thursday

The church fire in the Baruwa area in the north of the sprawling city spread to nearby oil pipelines, which burst into flames, he added.

The oil pipelines are understood to have been extremely hazardous after they were vandalised by thieves.

'We have recovered the body of a man. He was burned beyond recognition, while another person (the pastor) was injured with severe burns,' Farinloye said.

Smoke rises from the scene of a pipeline fire outbreak at a residential area of Iyana Odo, Isheri-Olofin, Lagos today

People stand over a scorched wooden bridge which was blown to pieces by the pipeline blast in the Isheri-Olofin area of Lagos

The head of Lagos state emergency service LASEMA, Femi Oke-Osanyintolu, confirmed the accident, adding that operations were under way to extinguish the pipeline blaze.

'We are responding quickly to put out the fire. Only one body has been recovered, while the other person who was injured is receiving treatment,' he added.

The area has been affected a spate of recent pipeline explosions, as noted by the man filming the footage.