China National Offshore Oil Corp. (CNOOC) began construction of a new petrochemical refinery in southern China's island province of Hainan Sunday.

The industrial park in Dongfang City is scheduled to begin production of liquid-gas and chemical products using petroleum from the South China Sea in December 2012, the company said.

Investments in phase one of the project totals 4.3 billion yuan (648 million U.S. dollars). The company plans to invest another 3.9 billion yuan for phase two of the project, which will produce vinyl products by April 2013.

China's largest oil and gas producer, CNOOC generated revenue of 209.6 billion yuan last year, when its oil and gas production reached 47.66 million tonnes of oil equivalent and its refinery and chemical output totaled 32 million tonnes.