Shanghai officially started using natural gas from the West-East Gas Pipeline Project Thursday, as the eastern part of the project shifted into full gear.

Gas supply to Shanghai will be maintained around 500,000 cubic meters daily for the time being. Residents in Jiading and Fengxian districts and industry giants such as Shanghai Baosteel Group Corp and Shanghai General Motors were the first local users to receive gas from the pipeline.

Mayor Han Zheng said most city residents will use natural gas by 2010.

"The West-East Pipeline Project will help the city to accomplish this aim," he said.

The gas reaches the city after traveling along the 1,485-kilometer-long pipeline from Changqing gas field in Shaanxi Province. To date, only the eastern part of the around 4,000-kilometer-long project is in operation.

"Residents in northern parts of the city and Songjiang District will be the next group of users," said Wang Yuchu, general manager of Shanghai Natural Gas Pipeline Networks Co Ltd. "We will further endeavor to explore the market and attract more users."

Shanghai Natural Gas Pipeline Networks is the city's main distributor of natural gas. It signed a sales deal with China National Petroleum Corp, the main sponsor of the project, in town Thursday.

Wang Ning, an executive with CNPC, said in an earlier media report that gas for residential use is priced at 1.37 yuan (16.5 US cents) per cubic meter, industrial-used gas is 1.25 yuan a cubic meter while the price for electricity generating is 1.13 yuan a cubic meter.

It is estimated that there are 613,700 natural gas users in the city, where sales of the fuel grew by 31.2 percent last year.

The city's demand for natural gas is estimated to sit at 3 billion cubic meters in 2005. The figure will double in 2010 and triple in 2015. Construction on the project began in July, 2002. It is designed to carry 12 billion cubic meters of natural gas a year from the Tarim Basin in the Xinjiang Uygur Autonomous Region and the Changqing gas field in Shaanxi to the eastern regions.

(eastday.com January 2, 2004)