Qatar and Shell to build China oil venture

By Chen Aizhu and Jim Bai

BEIJING (Reuters) - Qatar and Royal Dutch Shell (RDSa.L), together with PetroChina (0857.HK), plan to build an oil refining and petrochemical complex in China 08567.HK, the companies said.

Although it supplies less than one percent of China's crude imports, the refinery and petrochemical venture represents Qatar's first foray into the massive Chinese oil market, following Middle East peers Saudi Arabia and Kuwait.

"This step will help draw up a road map for setting up economic bridges between Qatar and China and opens investment opportunities," Qatar's Oil Minister Abdulla Bin Hamad Al Attiyah said.

The deal, signed on Monday, cements China's energy ties with Qatar, the world's top exporter of liquefied natural gas (LNG), just two months after the Asian giant agreed to buy from Qatar a total of 5 million tonnes a year of LNG for 25 years.

It will also help usher in Shell after years of hard work trying to break into the tightly state-controlled Chinese fuel market.

The deal, signed in Doha during Chinese Vice President Xi Jinping's state visit, reaffirms analysts' views that Beijing's energy industry policy favours foreign partners with a combination of access to resources and top-notch technology.

"If an international major is hooked up with a resource player, the chances (to break into the Chinese market) will be much higher," said Yan Kefeng of Cambridge Energy Research Associates in Beijing.

But Monday's letter of intent did not give an investment figure, nor the location, scale or timeframe of the proposed multi-billion-dollar venture.