Construction of a coal-to-liquid (CTL) project, owned by Shenhua Ningxia Coal Industry Group with an estimated annual production of 4 million tons, began Saturday in Northwest China's Ningxia Hui Autonomous Region, the Xinhua News Agency reported Saturday.

The CTL project can diversify ­China's local sources of oil, as China's dependence on imported oil reached 58.7 percent and its dependence on imported natural gas surpassed 28.9 percent in 2012, with both continuing to rise, said Tan Rongyao, an official with the National Energy Administration.