Winny Wang/Shanghai Daily news

China is planning to set up a factory in Yunnan to refine crude oil transported via a pipeline linking China and Myanmar, said Han Jingkuan, an official of PetroChina Company Limited.

The two countries are conducting a feasibility study on building the pipeline to transport natural gas and oil, Beijing Morning Post quoted Han as saying today.

Han said China may build a refinery factory near Kunming City, Yunnan Province, but he refused to reveal the timetable of the construction of the pipeline.

The two sides have been planning to build the pipeline through the Indian Ocean to relieve China’s dependency on the Straits of Malacca, which carries about four-fifths of China's oil imports, the report said.

China National Oil & Gas Exploration & Development Corp and Myanmar state-owned oil companies signed a contract last month to get exploration rights in three deep-water areas in Myanmar.

China National Petroleum Corp, the nation's top oil producer, signed a contract with Myanmar's government last month to explore in the country.