Analysts said the Dushanzi project will boost the local economy in the Xinjiang Uygur autonomous region and will help to ease domestic pressure for oil.

Apart from the Dushanzi project, the CNPC has also constructed big projects in the northeast, northwest and southern regions to increase its refining capacity. Its first large refining project in Guangxi in the south is 90 percent complete.

CNPC expects to raise its crude production by 1 million tons and natural gas output by 11.5 billion cubic meters in 2008.

The company plans to build a 10-million-ton refinery in Liaoning province's Huludao. It has approved the plant's feasibility study, a CNPC source said

But it still needs government approval, said the source, who did not wish to be named.

CNPC last year signed cooperation deals with several provinces including Shandong, Yunnan, Henan and Gansu. Sources with the company said it plans to build two refineries in Shandong and Yunnan. The Shandong project is located in the coastal city of Weihai, while the Yunnan refinery will be built in provincial capital Kunming.

China refined 326.79 million tons of crude oil in 2007, an increase of 6.4 percent, the China Petroleum and Chemical Industry Association said.

China produced 186.7 million tons of crude oil in 2007, up 1.6 percent from 2006, the association said.

CNPC's listed arm PetroChina posted 2.4 percent net profit growth in 2007 to 145.63 billion yuan.

PetroChina's turnover in 2007 reached 835.04 billion yuan, an increase of 21.2 percent from the previous year. Its total output of crude oil and natural gas was 1.11 billion barrels of oil equivalent, an increase of 4.8 percent from 2006.

(China Daily 03/27/2008 page13)