The Governments of Kuwait and China signed a deal to realize a much-awaited $9 billion refinery project in south China's Guangdong Province, Kuwait News Agency reported late Monday.

The deal will pave the way for Kuwait to achieve its China-bound crude oil export target of 500,000 barrels a day by 2015, according to the Kuwait state news agency.

The agreement, which was signed in Beijing by Kuwaiti Oil Minister Sheikh Ahmad Al Sabah and National Energy Administration Chairman Zhang Guobao after deliberations Sunday between Kuwait's Emir Sheikh Sabah Al Sabah and Chinese President Hu Jintao, will be the largest Sino-foreign joint venture in China.

"Kuwait holds a 30% stake and Sinopec owns 50%, while Dow Chemical Co. of the US and Royal Dutch Shell each holds a 10% share in the venture to construct a refinery and petrochemical complex, slated to be operational in 2013," Minister Al Sabah said.

He added the agreement "comes in an excellent time with signs of the global economic recovery" and will take bilateral energy cooperation between Kuwait and China to a new level.

The refinery, which was originally planned for Nansha has been relocated due to concerns by the Chinese authorities on environmental impact on the densely populated area, including Hong Kong.

The refinery will be designed to process 100% Kuwaiti crude supplied by state-run Kuwait Petroleum Corporation, or KPC, with a capacity of 300,000 barrels per day and the ethylene cracker unit will have an annual production capacity of 1 million tons, said Al Sabah.

KPC's subsidiary Kuwait Petroleum International, or KPI, has teamed up with China's biggest oil refiner Sinopec Corp. for the project and participating firms will provide the funds depending on their ratio of investment.

Next steps include the submission of a basic plan from Kuwait to the Chinese authorities on the refinery's location before the final approval from Chinese authorities. An environmental impact assessment has already been submitted.

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