LONDON (Bloomberg) - Kazakhstan plans to start building in March the final section of an oil pipeline that will link its Caspian Sea fields with refineries in northwestern China.

KazMunaiGaz National Co., the state-run energy producer, and China National Petroleum Corp. intend to spend $1 billion on building the link between Kenkiyak and Kumkol, which will stretch for 761 kilometres (470 miles), Prime Minister Karim Masimov said in a statement on the government website.

Kazakhstan is seeking ways to directly export energy resources to neighboring China, the world's second-largest energy user after the US. The new section will connect a network between the Caspian region, which holds as much as four percent of global oil and gas reserves, and the existing Atasu-Alashankau pipeline, which Russia supplies from Siberian fields.

"The project's implementation will allow trunk pipelines in Kazakhstan to be connected to a unified system and integrate it with crude oil pipelines in Russia and China," KazMunaiGaz said in an e-mailed statement yesterday.

The Kenkiyak-Kumkol link will be completed in October 2009 and will have an annual capacity of 10 million metric tons, or 200,000 barrels a day, KazMunaiGaz said. The capacity will be doubled if necessary.

The oil fields at Kenkiyak and Kumkol are operated by two units of China National, CNPC-International Aktobe Petroleum JSC and PetroKazakhstan Ltd., respectively.