CNOOC'S first oil refinery is set to sell most of its production to the thriving local market of Guangdong Province when it starts up in September 2008, a senior plant manager said Tuesday.

Guangdong, the biggest economy of China's provinces and the largest fuel using region, has been the main battlefield for oil firms eager to expand.

CNOOC also has plans to build a distribution network including 300 petrol stations in Guangdong and a storage center in Dongguan City to be linked with the new plant via a pipeline, said Wu Qing of CNOOC Refining & Chemical Co.

The 240,000 barrels-per-day Huizhou refinery is slated to produce 3.56 million tons of high quality diesel, 1.25 million tons of gasoline and 2.1 million tons of jet fuel, Wu said.

"Guangdong Province is still short of oil. Our refinery will be able to help ease that shortage," Wu told reporters on the sidelines of an industry seminar organized by Guangdong Oil and Gas Association.

Wu, previously a refining expert at top refiner Sinopec Corp., said the Huizhou plant was designed to produce a higher than usual volume of diesel and aviation fuel, which together will account for nearly half of the plant's capacity.

CNOOC, parent of China's offshore oil and gas specialist CNOOC Ltd. but a newcomer to refining, is building the 21.8 billion yuan (US$2.82 billion) plant using technologies from oil major Royal Dutch Shell, America's UOP and Foster Wheeler, Wu said.

The plant is designed to process offshore Bohai crude PL 19-3, a heavy, highly acidic grade into premium diesel with a low pour point meeting EURO III and IV quality standards.

The new plant is also expect- ed to supply almost the full requirement of naphtha from the Shell-CNOOC joint venture petrochemical complex at the same site, which has so far been fed mostly on imported condensate, Wu said.

Editor: Yan