China and Russia will jointly build a 21 billion yuan ($3.07 billion) refinery in the northern Tianjin municipality next year to tap the rising domestic demand, said the local government.

The refinery, located in the Binhai Industrial Zone, will be able to process 10 million tons of crude oil annually. It is scheduled to complete construction in 2012, the Tianjin municipal government said on its website.

The project is being developed by China National Petroleum Corp (CNPC) and Russia's OAO Rosneft.