PetroChina Co Ltd, the country's top oil and gas producer, has started construction of an oil shale refinery in northeastern China's Heilongjiang province, the official Xinhua News Agency reported.

The refinery, located in Mudanjiang city, involves a total investment of one billion yuan, the agency said.

The plant is designed to process 1.2 million tons of oil shale per year and produce 100,000 tons of oil products.

Total oil shale reserves in Mudanjiang are estimated at 46.2 million tons.

The company has said it plans to invest 10 billion yuan by 2020 to develop alternative energy sources, including oil shale, bio-fuels, wind power, coal-bed methane and geothermal energy.

(US$1 = 6.9 yuan )

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