Jan. 10, 2007 (China Knowledge) – China National Offshore Oil Corp (CNOOC) is partnering Jakarta-listed Sinar Mas Agro Resources and Technology (SMART) and Hong Kong-listed HKC (Holdings) to produce biodiesel from crude palm oil and bioethanol from sugarcane or cassava.

According to a statement from SMART, a preliminary agreement has been signed between these three companies, which will spend US$5.5 billion over three phases in eight years to develop biofuels in Papua and Kalimantan, where the regional governments have land reserves of about one million hectares.

China, whose crude oil imports constituted for 50% of consumption while coal accounted for 70% of its energy requirements last year, is speeding up the development of renewable energy such as nuclear energy, hydropower, wind energy and biofuels.

As one of the Mainland’s major offshore oil and gas producers, CNOOC has been active in trying out other sources of energy. Last year, CNOOC agreed to work with Malaysia's Bio Sweet in studying the feasibility of building a palm oil-based biodiesel plant, which has an annual production capacity of 100,000 tons, on Hainan island. Another possible project is a RMB 2.35 billion biodiesel plant which uses jatropha (hedge plant) seeds as feedstock in Sichuan province.