"Yes, it's true, with China," Finance Ministry spokesman Bastos de Almeida told Reuters, confirming local media reports.

He gave no further details.

State oil firm Sonangol said in December that construction could start this year and that it was upbeat about finding investors for the project.

China is keen on oil from West Africa to fuel its rapid economic expansion.

Last month traders reported that the total flow of West African crude set to go to Asia in March matched the all-time high, buoyed by Chinese buying.

Angola is sub-Saharan Africa's second largest crude producer after Nigeria.

It churns out around 1,3 million barrels of oil per day and this is expected to rise to two million barrels per day as a number of new developments come onstream.

Angola has said in the past that it would like to see the refinery's capacity reach about 200 000 barrels per day.

Local media reported that the refinery would be built by a new joint venture called Sonangol-Sinopec International, an enterprise jointly controlled by the Angolan government run Sonangol oil company and China's state-owned Sinopec.

The new refinery will permit Angola to reduce imports and start to export value-added petroleum goods.

The Ministry of Petroleum estimates that 80 per cent of Lobito's production will be for export, principally serving regional countries.

Angola is attempting to rebuild after a brutal civil war which ended in 2002.

"The refinery has been one of these prestige projects that the government has been keen to see progress on," said Alex Vines, Africa head at the Royal Institute for International Affairs, a UK-based think-tank.

"It fits into the grand post-conflict infrastructural projects that the presidency wants to see progress on prior to any election," said Vines.

Angola is scheduled to hold its first parliamentary poll since 1992 this year but no firm date has been set.

- Nampa-Reuters

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