March 6 (Bloomberg) -- Saudi Aramco, Saudi Arabia's state- owned oil company, will take a 50 percent stake in a 12.5 billion-yuan ($1.8 billion) oil refinery that China Petroleum & Chemical Corp. is building.

The refinery at Qingdao in Shandong province will start processing crude oil in early April, Zhou Yuan, the vice chairman of Sinopec, as China Petroleum is known, said in an interview in Beijing today. Sinopec will take the remaining 50 percent stake, according to Zhou.

China, the world's second-biggest energy-consuming nation, plans to increase oil-refining capacity 25 percent by 2010. The country's biggest oil refiner started construction of the 10 million metric tons-a-year refinery in June 2005 to bolster its ability to supply fuels and chemicals to the world's fastest- growing major economy.

Sinopec is in discussions to sell a stake of its Qingdao refinery to Aramco and the talks may be completed ``anytime'' after partners agree on terms, Abdulaziz F. Al-Khayyal, the Saudi company 's senior vice-president for industrial relations, said Sept. 7.

Seperately, Sinopec's $5 billion joint refining plant with Kuwait Petroleum Corp. in the southern province of Guangdong may be delayed as it awaits environmental approval, Zhou said. ``So far we haven't obtained the approval from the state environmental agency.''

To contact the reporters on this story: Wang Ying in Beijing at wang30@bloomberg.net;

Last Updated: March 6, 2008 09:23 EST