The State Council has recently called a meeting to discuss a huge gas pipe project which is designed to send natural gas from China's western Xinjiang Uygur Autonomous Region to Shanghai Municipality in the east.

The State Development Planning Commission and the China National Petroleum Corp (CNPC) have submitted a feasibility report on the project concerning resources, the market and technology.

The State Council regards the project as extremely important in promoting economic growth in Xinjiang, in restructuring the industrial structure and energy consumption patterns and in raising economic efficiency in the eight provinces, autonomous regions and municipality along the pipe.

Officials said the project will also greatly benefit residents in Xinjiang by tapping the country's largest natural gas reserves in the Tarim Basin and greatly boost the local economy.

The project will also accelerate economic development in the areas along the pipe and increase their financial revenues and job opportunities accordingly.

During the first stage of the project, the 4,200 km long pipeline will provide 12 billion cubic meters of gas annually for industrial and domestic use to Shanghai, Jiangsu, Anhui, Henan, Shanxi, Shaanxi, Gansu provinces and the Ningxia Hui Autonomous Region.

Cleaner fuel will greatly contribute to environmental protection in cities and new sources of fuel will also promote other industries such as steel, building materials, petrochemicals and electricity.

An estimated 120 billion yuan (14.5 billion U.S. dollars) will be injected into the first stage of the project. The government expects foreign companies to invest in the project.

There are 419 billion cubic meters of proven natural gas reserves in the Tarim Basin. Further exploration in the next five to ten years might increase this figure to one trillion cubic meters.

The Tarim Basin, which is about the size of France, is known as the "Sea of Hope". China's oil and gas industry has an estimated 10.8 billion tons of crude oil reserves and 8,400 billion cubic meters of natural gas reserves.