China's largest oil producer, China National Petroleum Corp. (CNPC), will start up a 10-million-ton oil refinery in south China's Guangxi Zhuang Autonomous Region in December, a step to relieve tight energy supply in southwest China, the regional governor said on Wednesday.

Work on the plant, costing more than 15 billion yuan (US$2.2 billion), was launched at the end of 2006 in the coastal city of Qinzhou on the northern shore of the Beibu Gulf.

It is expected to process 10 million tons of crude oil and produce 6.7 million tons of refined products, said Ma Biao, the regional governor.

Annual revenue would be more than 40 billion yuan, he said.

"The distribution of oil plants in China is illogical. Southwest regions like Guangxi, Yunnan, Guizhou and Sichuan completely rely on outside supply and the refined oil supply is tight at present," said Shen Shaohong, an official with the Qinzhou Port Economic Development Zone said.

CNPC currently supplies its southwest market from a refinery in Dalian, a port city in northeast China's Liaoning Province. By processing imported crude in the Qinzhou refinery, CNPC could cut its transportation costs by 200 yuan per ton.

(Xinhua News Agency September 24, 2008)