Indian Oil Corporation is planning to join hands with China's state-owned China Petroleum and Chemical Corporation (Sinopec) to build a $4-billion refinery-cum-petrochemical complex in Shanghai.

"IOC is looking at a 26 per cent partnership in the project," said an IOC executive adding that the tie-up was yet to be finalised. The project is expected to go on-stream by 2009.

Officials told Business Standard, a proposal to this effect was likely to be placed before the Chinese government during Petroleum Minister Mani Shankar Aiyar's visit to Beijing in January. The minister is expected to be in China for about a week starting January 10.

Officials said the refinery was likely to come up in the northern part of Hangzhou Bay with a capacity of 10 million tonnes. The refinery-cum-petrochemical complex will include a million-tonne-per-annum ethylene cracker plant.

Sinopec is the largest producer and marketer of petroleum products and petrochemicals in Asia and has a refining capacity of over 140 million tonnes. IOC, with a refining capacity of 54 million tonnes, is India's biggest refiner.

Officials said since both India and China were also looking at exporting petroleum products, the partnership could help the two oil firms in the long-run. Sinopec is carrying out a feasibility study for the project after which, it would need the approval of the National Development and Reform Commission of China.

Aiyar's visit is part of India's attempt to forge an alliance with its closet rival in its hunt for overseas energy assets. China and India, two biggest consumers of oil and gas in Asia, have aggressively started scouting for oil and gas blocks in various parts of the world.