Many years of exploration have revealed four, national-scale gas fields in the Tarim, Qaidam, Shaanxi-Gansu-Ningxia, and Sichuan-Chongqing basins. By the end of last year, the country had proven gas reserves of 2,500 billion cubic meters with an annual production capacity of 18 billion cubic meters. China’s natural gas is to be found mostly in the west while the market for the gas is focused to the east.

In light of the breakthrough discoveries in the western basins, PetroChina will run a major, trunk gas pipeline to bring gas from the west through to the East Coast. This will serve not only to alleviate energy shortages in eastern regions but will also help raise the capital investment necessary to facilitate extraction in Western China.

At a meeting on 14 Feb 2000 the State Council heard reports on the appraisal, feasibility study and market research conducted by the State Planning and Development Commission and PetroChina Group. These reports confirmed that the pipeline project would enhance Xinjiang’s economic development by allowing it to exploit its natural gas surplus. It would also help the eight provinces on the route of the pipeline to develop their industrial bases, upgrade their energy structures and improve economic efficiency. On 25 March 2000 the West-East Pipeline Project Construction Committee announced the beginning of the preliminary stages of the project.