PetroSA, South Africa's national oil company, and China Petroleum and Chemical Corp., known as Sinopec, will build a refinery in South Africa that could process several hundred thousand barrels of oil a day and cost several billion dollars to construct.

PetroSA Group Chief Executive Nosizwe Nokwe said Monday that teaming up with state-owned Sinopec would enable the South African company to complete the "mega" project, which has been in discussion since 2008 but has struggled to find sufficient funding.

Chinese resource companies are driving much of the country's investment in Africa. Standard Bank estimates that merger-and-acquisition activity from China on the continent totaled $5 billion last year.

China has become Africa's biggest trading partner, and the new refinery could play a role in furthering China's ambition to expand global resource trading by being a destination for crude oil.

"Sub-Saharan Africa is a growth area for oil demand," said Roy Jordan, a consultant at Facts Global Energy. "It will be helpful to have both crude-oil production and more refinery capacity on the continent."

South Africa currently has four refineries, Mr. Jordan said. In addition, African countries such as Uganda have had recent oil and gas discoveries that will drive more interest in the sector, he said.

Sinopec and PetroSA signed a memorandum of understanding in September and on Monday settled the agreement to work together.

PetroSA announced plans to build the refinery, called Project Mthombo, in 2008 but funding issues helped stall its development in the southern town of Port Elizabeth. At the time, the company said it expected the refinery in the Coega Industrial Development Zone to process 400,000 barrels of oil a day and cost between $9 billion and $10 billion to build.

A spokesman for PetroSA said final capacity and cost will be determined by a study to be undertaken soon. The study, which will be carried out by Sinopec Engineering, will take as many as 18 months to complete. PetroSA said the refinery is scheduled to be commissioned between 2018 and 2020.

South Africa is an importer of crude oil, mostly from Iran and Saudi Arabia. Many refineries said they have cut Iranian crude-oil imports amid international pressure.