The West-to-East Gas Diversion Project, as well as the "West-to-East Electricity Transmission," and the "South-to-North Water Diversion" is the governments key national strategic project, aimed at realigning overall economic development and achieving rational distribution of national resources across China. There is a natural gas storage of 26,000 billion m3, occupying 87% of the national storage, in Tarim Basin, Qaidam Basin, and Szechwan Basin, etc. gas fields in Western China, among which Tarim Basin in Xinjiang Uygur Autonomous Region has the capacity of 8,000 billion m3,22% of the national storage. The discovery of the natural gas reserves in Tarim Basin made China the fourth largest gas country after Russia, Qatar and Saudi Arabia.

The launch of the West-to-East Gas Diversion Project was passed in February, 2000. It is the landmark project of the Great Western Development Strategy in China. The first phase of the West-to-East Gas Diversion Project includes a 4,200km trunk pipeline running from Lunnan in Tarim Basin to Shanghai, conveying natural gas to central China, Eastern China and the Yangtze River delta zone. Finished in 2004, it is expected to have a capacity of 12 billion m3 annually. The second phase of the Project, operated by Petro China, will have a designed gas capacity of 30 billion m3 annually and the construction will begin in 2008. This second pipeline will be mainly supplied by Turkmenistan and Kazakstan, the Central Asia-China gas pipe- line. The third pipeline is designed to convey a joint gas supply from Russia and Xinjiang to the Yangtze River Delta and the Pearl River Delta.