CHINA Petrochemical Corporation, better known as Sinopec, has agreed to set up a new venture in partnership with an Iceland-based company to further develop geothermal energy in China as it seeks to expand renewable resources.

"The geothermal energy development is strategically important for the company as we aim to build the business into one of our main pillars within three years," said Su Shulin, general manager of Sinopec, Asia's largest refiner.

Sinopec Star Petroleum Company, a subsidiary of Sinopec, and its Iceland partner Geysir Energy Green Energy signed an agreement on June 9 to establish the Sino-Icelandic Green Energy Geothermal Development Corporation, Sinopec said today.

Sinopec and Geysir also planned to enlarge their existing geothermal district heating projects in northern Shaanxi and central Hebei Province.

The two parties initiated the cooperation in May 2005 and operated three projects via a joint venture with a combined installed peak-load capacity of 140 megawatts, capable of supplying geothermal heating to 3 million square meters.

The establishment of the new corporation will be a platform for nationwide geothermal development in China, Geysir said.

Geysir said the two companies share a common objective to promote further development of the renewable energy sector and to develop geothermal district heating services on a broader scale in China.

Sinopec plans to build Sinopec Star Petroleum into a leader in geothermal energy development, Sinopec said.