China's biggest oil refiner, Sinopec, and China Ocean Shipping (Group) Company (COSCO), the country's biggest ship owner, plan to set up a shipping joint venture for oil imports, a COSCO official said.

The two State-owned conglomerates intend to float the new venture on the stock exchange, according to the website of China's Ministry of Communications.

A senior official from COSCO who asked not to be named confirmed the plan but would not comment further. "I am not authorized by the board to reveal related information," he said. On Wednesday the two firms signed an agreement which sets out how China Ocean will help Sinopec transport 6 million tons of oil this year. The figure is expected to reach 30 million tons "in the future," a time they didn't specify.

The COSCO source said the shipping giant usually only provided a ship rental business to the country's big oil firms for oil transportation. "This getting together with Sinopec is our first large-scale and strategic partnership with domestic oil heavyweights," he said.

Sinopec was unavailable for comment.

Last year China bought 127 million tons of crude oil from abroad, a year-on-year increase of 3.3 per cent.

Oil demand in China, the world's second largest energy consumer after the United States, may grow by 5.9 per cent this year to 7 million barrels a day, the International Energy Agency said in a recent report.

More than 90 percent of the country's imported oil is currently carried by foreign oil tankers, the communications ministry said on its website.

Industry analysts suggested half of the country's imported oil should be transported by Chinese ships as an essential part of China's energy security.

Source: China Daily