Hong Kong-listed property developer and energy firm Sino Prosper Holdings Ltd. (0766.HK) said it will invest about $50 million in a bitumen oil project in Indonesia, to cash in on the mainland's surging consumption of heavy oil, China Daily reported Thursday.

The project, located on Buton Island, near Indonesia's Southeast Sulawesi Province, will begin commercial operation in June 2007. It is expected to be producing at least 5 million metric tons in five years, the report said, citing the company's chief executive, Tang Yantian.

The extraction of bitumen at Buton Island is Sino Prosper's first resources project.

China Petroleum & Chemical Corp. (0386.HK), or Sinopec, and China's Ministry of Communications have signed underwriter contracts to be the sole distribution agents for the project.

Marine fuel oil, also known as heavy oil, has a high sulfur content and is used in transportation and heavy industries.

In 2004, China consumed 44 million tons of heavy oil, half of which was imported.

China's demand for imported heavy oil has been growing at a compound annual growth rate of 35% over the last 10 years, the report said, citing a Sino Prosper research note.

The company earlier this year signed a memorandum to be the contractor of a coking coal mining project in Northwest China's Xinjiang province, in which it has invested CNY380 million.

The coking coal project is expected to produce 1.8 million tons of coking coal in the first phase, the report said, citing Tang.