UPDATE 2-China, Venezuela to ink oil, refinery deal

(Recasts, adds background)

By Jim Bai

BEIJING, May 6 (Reuters) - Beijing and Caracas will further strengthen energy links by signing a deal this week to jointly build a refinery in China to process Venezuelan crude, oil executives said on Tuesday.

The framework deal would help boost Venezuela's crude sales to the world's second-largest oil consumer by 400,000 barrels per day, about five times the current volume.

China is emerging as a key buyer of Venezuelan oil, while stepping up financial aid to cash-strapped Caracas as leftist President Hugo Chavez uses oil money to fund socialist projects. Chavez is keen to move away from heavy reliance on oil exports to the United States.

The deal is due for signing in Caracas during a state visit later this week by Vice Chinese Premier Hui Liangyu, said Shen Diancheng, vice president of the largest Chinese oil and gas firm PetroChina (0857.HK)

Shen also said his firm was in talks to build a refining and petrochemical complex in eastern China with Qatar, the third Middle East oil exporter to enter China's refining business after Saudi Arabia and Kuwait.

Just a few weeks ago PetroChina agreed to a 25-year supply pact to import Qatari liquefied natural gas, part of Beijing's plan to boost use of the clean fuel to power the rapid growth of the world's fourth-largest economy.

CONCRETE STEP