China National Offshore Oil Corp (CNOOC), China's largest offshore oil company, started construction of its alkene project with investment of RMB 5 billion on Thursday in Hainan Province, sources reported.

The huge project, scheduled for completion in May 2011, will produce fine chemicals, such as propylene, liquefied natural gas, methyl tert-butyl ether and naphtha. The predicted annual output of the project is 2 million tons.

CNOOC started a methyl alcohol project with estimated yield of 800,000 tons a year last November in Hainan Province. The province has received investments of RMB 20 billion from CNOOC in the past few years, sources reported.

The oil producer also intends to further explore the natural gas reserves under the South China Sea and plans to increase its yield by 20 billion to 30 billion cubic meters, said Zhou Shouwei, the vice-general manager of CNOOC.