A proposed refinery, a petrochemical joint venture between China's CNPC, Royal Dutch Shell Plc and Qatar, this week signed a framework deal with local authorities in eastern China's Zhejiang province where the mega project will be built.

The project, to include a 400,000-barrel-per-day oil refining and 1.2 million tonnes-per-year ethylene plant, won initial approval from the National Development and Reform Commission, the country's macro planner, in June, industry officials have said.

Pending final government approval, which also includes an environmental clearance, the greenfield refinery would give Shell and Qatar their first solid foothold in the world's No.2 oil consumer, which is embarking on a refinery building boom.

The Taizhou venture, in coastal Zhejiang province, will use imported condensate and other raw materials to produce ethylene and other petrochemicals, CNPC said in a company newspaper.

The agreement further clarifies work scope and targets for each side, reflecting sincere intentions to cooperate, it said.

In January, Qatar Oil Minister Abdullah al-Attiyah and Wang Yong, head of the state-owned Assets Supervision and Administration Commission (SASAC), which is both a regulator and shareholder in most of China's big state-owned companies, pledged to strengthen cooperation in the oil and gas sector and discussed the Taizhou project.

Industry experts told Reuters that the project, likely to cost close to $10 billion, would be led by Shell on the foreign partners' side. Such an alliance follows a giant supply agreement between Qatar and China.

The project looks promising to win Chinese government's final blessing, as China may see Qatar quite a stabilising factor among the Middle East resource nations, said an industry veteran.

CNPC is parent of PetroChina , Asia's top oil and gas firm.

In May 2010, CNPC and Qatar Petroleum signed a 30-year deal for gas exploration and production in Qatar, holder of the world's third-largest gas reserves. Shell, as operator, will hold a 75 percent equity stake, with CNPC holding the remainder.