Construction of the China-Kazakhstan oil pipeline is going well, sources with China National Petroleum Corporation (CNPC), China's biggest oil producer, said Friday.

Construction of the 998-kilometer oil pipeline, which begun in September 2004, is scheduled to be completed by December 2005, said CNPC spokesman Li Runsheng.

An agreement on a cross-border oil pipeline linking Atasu in Kazakhstan to Alataw Pass of northwestern Xinjiang Uygur Autonomous Region was signed May 17, 2004 between CNPC and the Kazakhstan National Petroleum and Natural Gas Company (KMG).

According to the agreement, the oil pipeline will be jointly laid by CNPC and KMG. After being completed, the oil pipeline will be able to carry 10 million tons of oil per year in its initial phase.

An extension of the oil pipeline, which is planned to be 252 km long, will be constructed from Alataw Pass to Dushanzi oil refinery in Xinjiang, said Li.

Constructed by the CNPC alone, the extended oil pipeline broke ground recently, said Li.

According to Li, a 448-km oil pipeline in Kazakhstan linking Atyrau to Kenkiyak jointly invested in by CNPC and KMG was completed in March 2003. Built to meet the oil transportation demands of the oil-rich Aktyubinsk region, the pipeline was not included in the agreement on the Kazakhstan-China oil pipeline.

China's imports of oil from Kazakhstan, the world's third largest oil producer, now travel hundreds of kilometers by rail to Xinjiang.