SHANGHAI - CHINA National Petroleum, the country's biggest oil and gas producer, is in talks with Qatar Petroleum to set up a petrochemical joint venture in China, Chinese state media said on Wednesday.

While the two sides have not decided where to locate the plant or how much to spend on it, they are working on a feasibility study, the China Securities Journal reported, citing an unnamed source with PetroChina.

The project, expected to be completed in 2013, will have an annual capacity of between 700,000 and 800,000 tonnes in the initial stage, the report said.

The official Xinhua news agency has reported that China's state economic planning body and Qatar's energy ministry on Sunday signed a memorandum on energy cooperation in Doha.

Qatar has the world's third-largest gas reserves.