CHINA will receive four million tons of crude oil from Kazakhstan next year through a pipeline commissioned in July, a Kazakh official from the project said yesterday.

The figure, less than half the pipeline's capacity, excludes any Russian oil that may be carried to China through the pipeline, Bakhtiyar M. Tokbaev, deputy general commerce director at Kazakhstan-China Pipeline LLP, told reporters in Shanghai.

China and Kazakhstan completed constructing the US$800 million project in December last year, establishing a pipeline capable of carrying 10 million tons of oil annually, Bloomberg News reported.

Russian companies are in talks to take up some of the spare capacity for exports to China.

"It is hard to predict when it could be running at full capacity," Tokbaev said at the third Sino-Russian-Kazakh Oil and Gas Conference. Utilization of the pipeline will depend on the outcome of negotiations for sales to China, he said.

The pipeline has transported two million tons of Kazakh crude to China so far, Tokbaev said. The company plans to gradually double the pipeline's capacity to 20 million tons.

"Expansion has become a key objective," he said.

Kazakhstan, with 3.3 percent of the world's proven oil reserves, plans to triple output to 3.6 million barrels a day by 2015, equivalent to about four percent of the world's output last year or a third of Saudi Arabia's production.

China's annual demand for oil products may reach as much as 230 million metric tons by 2010, a researcher from China's second-largest oil company said.

Oil-product demand in the world's fastest-growing major economy will increase by six percent a year through 2010, Hou Hui from China Petrochemical Corp's economics and development research institute, said yesterday.

Hou also said the nation's capacity to produce ethanol may reach as much as five million tons by 2010.