China has denied reports that Beijing will be involved in a proposed canal project that will cut through southern Thailand.

Chinese foreign ministry spokesman Hong Lei on Tuesday said that he is not aware of the project, after the Chinese Embassy in Thailand also made a similar denial, saying that the Chinese government has no role in the project and the deal is between private companies, the Beijing News reported.

A report by Nanfang Daily on May 14 said that a memorandum of cooperation on the construction of the Kra Canal in Thailand has been signed in Guangzhou, Guangdong Province.

The canal is said to be located at Kra Isthmus, the narrowest part of the Malay peninsula in southern Thailand. Dubbed as an important project of China's 21st century maritime Silk Road, the canal is seen as a shorter route that would enable ships to bypass the Malacca Strait to cut their voyage by 1,200 kilometers, or two to five days in shipment time, the report said. The project is for a two-way 25-meter-deep canal measuring 102 kilometers long and 400 meter wide. The Panama Canal is only 15 meters deep and measures only 304 meters at its widest point.

The project will likely take 10 years to complete and will cost $28 billion, the report said. The Strait of Malacca is an important maritime passage. Eighty percent of oil from the Middle East and Africa to China has to pass through the strait, where pirates pose a constant threat to China's oil supply.

A Xinhua News Agency report said that the project was announced on April 10 at a joint press conference by China-Thailand Kra Infrastructure Investment and Development Co Ltd and Thai Defense Minister General Prawit Wongsuwon.

Guo Yi, chairman of the company, said that China's infrastructure in Thailand will help to advance the "One Belt, One Road" initiatives, and to bring economic benefits to Thailand.