DAMASCUS, Sept 18 Syria's Oil Minister Sufian Alao has met representatives of Chinese companies in Beijing and discussed a long delayed refinery project that could help save Syria billions of dollars in fuel imports.

The official Syrian news agency said on Saturday the meetings last week involved the China National Petroleum Cooperation, Sinochem and Sinopec.

The two sides also discussed eight oil blocks the Syrian government had offered for exploration on production sharing basis, the agency said.

Construction of the 70,000-barrel per day refinery in the oil centre of Deir al-Zor was due to begin in 2008.

Other refinery projects designed to lessen Syria's dependence on imported oil products, especially gas oil, have been also delayed or cancelled.

Syria's two existing refineries, built 3-4 decades ago, have a combined capacity of 240,000 bpd. They have been increasingly unable to meet domestic demand, costing the state billions of dollars in fuel imports in the last several years.

Oil industry executives said foreign firms have been hesitant to commit the investment needed to build refineries in Syria without more support from the Syrian government, which has been trying to lure them with build, operate and transfer deals, instead of turnkey contracts.

The Chinese refinery is designed to process Syrian heavy crude oil.

The refinery could eventually take in oil from neighbouring Iraq, if political differences between Syria and Iraq that have delayed plans to re-activate an oil pipeline from Kirkuk to Syria's Mediterranean coast are resolved.

The Syrian government has been reinforcing links with Chinese, Russian and Indian companies since coming under US sanctions in 2004 that have hampered Western investment in the oil and gas sectors.

Syria's oil production has steadily declined to around 380,000 bpd last year, according to official figures, down from a peak of 590,000 bpd in 1996.—Reuters