Qatar Petroleum International (QPI) is in talks with Chinese oil firms to set up a major olefine joint venture in China's southern Hainan island, a local official said on Tuesday.

QPI is negotiating with Shide Group, a private company based in Dalian, and a major Chinese oil firm to invest 38 billion yuan ($5.56 billion) to build the plant in Yangpu, Shi Zhen, head of the Investment Promotion Bureau of Yangpu Economic Development Zone, told Reuters.

Shi declined to identify which oil firm was in discussions.

QPI will provide liquefied petroleum gas as feedstock for the petrochemical complex and when completed, the plant will have a total capacity of 3.9 million tonnes of olefins a year, Shi said.

'We have yet to submit the project to the National Development and Reform Commission for approval,' Shi added.

'We will do so in the first half of next year. This is one of our medium and long-term project and I think at least three years are needed before production can be launched.'

Qatar, the world's largest exporter of liquefied natural gas (LNG), has sealed multi-billion-dollar pacts to supply China with the clean-burning fuel.

The Middle Eastern energy exporter is also looking to build an oil refinery in partnership with PetroChina in eastern China.-Reuters