French oil major Total and Chinese state oil trader Sinochem Corp have set up a 900 million yuan ($109 million) joint venture to sell oil products at petrol stations in northern China, the Chinese firm said.
Sinochem would hold 51 percent in the joint venture, which would build 200 petrol stations within seven years. Total would hold the remaining 49 percent of the venture, Sinochem said in a statement.
The deal was signed as French President Jacques Chirac visited China.
The joint venture was expected to sell no less than 800,000 tonnes of oil products in Beijing and the neighbouring city of Tianjin and the provinces of Hebei and Liaoning by 2012, it said.
Setting up the retail network in northern China is a significant step in Sinochem's oil development strategy, it said.
China, the world's second-largest oil consumer after the United States, has closely guarded its state oil-dominated market.
It only allowed oil giants BP, Royal Dutch/Shell and ExxonMobil to take a slice of the market in return for their support in the initial stock offerings of Chinese oil firms in 2000 and 2001.
BP operates 360 retail outlets in a tie-up with top Chinese oil major PetroChina in the booming southern province of Guangdong.
Shell signed a deal in August with state refiner Sinopec to eventually operate 500 service stations in eastern province of Jiangsu.
Sinochem, China's oldest oil and petrochemcals trader, wants to become an integrated oil firm.
It has co-operated with Total for more than a decade in running China's leading export refinery West Pacific Petrochemical Co Ltd (WEPEC).
Based in the north-eastern port city of Dalian, WEPEC now has a nameplate primary crude processing capacity of 10 million tonnes a year.
Sinochem signed a contact last month to buy South Korea's smallest refiner, Inchon Oil, for about $549 million - China's first take-over of a foreign oil company.
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