China has signed a deal to buy Venezuelan oil in a move that could mean a shift of supplies away from the US.

President Hu Jintao and his Venezuelan counterpart Hugo Chavez held a signing ceremony after a one-hour meeting in Beijing's Great Hall of the People on Wednesday.

The deal will expand energy ties between the two nations with plans to build three oil refineries in China capable of processing Venezuelan crude, which is heavily-laden with sulfur.

Chavez has said he expects exports to China to more than treble to one million barrels per day by 2012 and has announced that the two governments plan to double the size of a joint investment fund to $12 billion. Industry sources however say the great distance between the two countries could be an obstacle to the sale of large volumes.

The expansion in economic ties with China is likely to encourage Chavez to pursue his long-stated plan to divert oil supplies away from the US - a development that has caused unease in Washington.

Venezuela has already become one of China's major oil suppliers, increasing exports to the equivalent of 360,000 barrels a day last month, compared to 280,000 barrels a day earlier this year.

During Chavez's three-day visit, the two countries are expected to sign a number of trade deals, including contracts for the construction of four oil tankers as well as projects in agriculture, telecommunications, electronics and petrochemicals.

Before his arrival in Beijing on Tuesday, Chavez announced plans to purchase combat and training aircraft from China as part of plans to strengthen its air defense capabilities.

This week, Chavez has snubbed the UN meeting in New York in favor of a diplomatic mission to China. On arrival in Beijing he made a stark address condemning US interference in Latin American affairs.

"We're no longer the backyard of the United States," he said.

FBA/WY