The Baihe transfer substation in Shanghai's Qingpu District is the last station of the 200 billion yuan (US$24.1 billion) west-east gas pipeline project.

The project's aim is to carry natural gas from the Tarim Basin in Northwest China's Xinjiang Uygur Autonomous Region and the Changqing Gas Field in Shaanxi to eastern China, including Shanghai.

Although the gas from the west has not yet been connected to Shanghai's natural gas network, the city is ready to use the gas from the project.

Li Songhua, an official with Shanghai Natural Gas Pipeline Networks Ltd, said: "We expect to connect the gas from the west into the city network by the end of this year, with households as the first users."

His company has invested over 3.4 billion yuan (US$410 million) in building the network in Shanghai.

Last month, the company signed a draft contract with PetroChina to buy gas from western China.

"We are still negotiating with PetroChina about all the details, including the volume and prices. We hope to nail down the deal by the end of this year before the commercial supply," Li told China Daily.

The Shanghai natural gas network has already been used to deliver gas from the East China Sea to Shanghai users.

Shanghai still relies heavily on coal as an energy source, but the city government has vowed to increase the use of the more environment-friendly natural gas in the hope this will improve the local energy structure and help protect the environment.

(China Daily October 8, 2003)