Oil giants BP and Sinopec are to open 500 petrol stations in Zhejiang, east China, as part of a joint venture.
Demand for cars and petrol is booming in China
BP already operates 360 service stations in the southern province of Guangdong, in a tie-up with another Chinese oil company, PetroChina.
The new firm aims to have 500 sites in the cities of Hangzhou, Ningbo and Shaoxing in the next three years, with petrol being supplied by Sinopec.
The value of the BP and Sinopec venture is put at 2.2bn yuan ($265m, £144m).
Demand for petrol is growing rapidly alongside car ownership in China.
Hong Kong-listed Sinopec operates about 30,000 service stations in China.
The Chinese government, which owns 77% of Sinopec, has been allowing foreign oil companies to enter the booming domestic market following their investment in the stocks of Chinese oil firms.
Shell have signed a deal with Sinopec to open 500 service stations in the eastern province of Jiangsu.
And in October French oil giant Total set up a joint venture in northern China with Sinochem.