PetroChina is planning to start construction on a CNY19bn ($3bn) crude refining project in Anning, Yunnan, China, in the second half of 2012.

Designed to process sour crude including oil and gases from the Middle East, the refining project involves construction of a 10 million tonnes per annum crude distillation unit, a 3.6million tonnes per annum residue hydrogenation unit, a 3million tonnes per annum fluid catalytic cracker, a 2million tonnes per annum reformer, a 1.8million tonnes per annum hydrocracker and a 1million tonnes per annum naphtha cracker, reports C1 Energy.

The company had a total of 12.2million tonnes per annum of refining capacity in southwest China at the end of 2011, according to ICIS C1 data.

The refining capacity in the region is likely to reach 32.2million tonnes per annum by the end of China's twelfth five-year plan period (2011-2016), representing 12% of PetroChina's total capacity.

The refining project, which is subject to approval from the National Development and Reform Commission, is expected to be completed in 2014.

The company has started construction of the Sino-Myanmar oil and gas pipeline, an accessory facility to the Yunnan refining project.

The crude pipeline transports 22million tonnes per annum of oil and gas and is expected to become operational in 2013.