BEIJING, July 2 -- PetroChina Co., the nation's top oil and gas producer, will import 40 percent of the crude oil it needs for refining this year, up from 30 percent in 2006, a company official said over the weekend.

    The move highlights China's increasing reliance on imported crude oil as demand for fuel grows rapidly.

    The company plans to process up to 120 million tons of crude this year, 10 million to 20 million tons more than last year, Zhang Hong, a deputy chief economic adviser at PetroChina's refining and marketing unit, said on the sidelines of an energy forum in Shanghai.

    China imported 47 percent of its oil needs last year. The ratio could rise one percentage point per year through 2020, according to Jiang Xinmin of the Energy Research Institute under the National Development and Reform Commission.

    Zhang also said the company's refining business would remain in the black if crude oil prices are below US$65 a barrel. China caps refined oil prices to keep inflation in check, leaving refineries unprofitable when crude costs are high.

    Crude futures in New York on Friday were quoted above US$70 a barrel for the first time since August.

    Separately, Sinopec Corp., China's largest oil refiner, has signed an initial agreement with South Korean counterpart SK Corp. to form a joint venture to build a 14.7 billion yuan (US$1.9 billion) petrochemical plant in central China, Shu Zhaoxia, a senior engineer at Sinopec parent China Petrochemical Corp's economics and development research institute, told reporters at the forum, confirming early reports that SK may join.

    Shu declined to give further details on the deal. Earlier reports had said Formosa Plastics Group in Taiwan was also considering taking a stake in the project.

    To be located in Wuhan, Hubei Province, the project will be able to produce 800,000 tons of ethylene, a basic petrochemical building block, a year when operation starts by 2010. It's the first refining and chemical project to operate at such a large scale in central China.

    (Source: Shanghai Daily)