China National Petroleum Corp. said Friday that it has signed a preliminary agreement with the Chongqing government to supply natural gas to be used as feedstock at petrochemical project in the municipality, located in southwestern China.

Germany chemical company BASF SE (BAS.XE) previously agreed to co-develop a 400,000-metric-ton-a-year facility to manufacture methylene diphenylene diisocyanate with a Chongqing-based company.

The natural gas-supply agreement was announced during a meeting between CNPC Chairman Jiang Jiemin and Chongqing's new party leader, Zhang Dejiang, who replaced fallen leader Bo Xilai in early March.

Methylene diphenylene diisocyanate is an intermediate product in the manufacture of polyurethane, which is widely used in construction and automotive industries.