BEIJING, Dec 29: China’s biggest oil company, China National Petroleum Corp., will spend 16 billion yuan ($2.2 billion, euro1.5 billion) to help build a natural gas pipeline from Turkmenistan that will eventually supply energy for booming cities such as Shanghai, a state news agency reported.

China’s energy demands have soared, driven by annual economic growth that has exceeded 10pc the past four years. Energy companies have signed a flurry of deals to explore for and develop oil and gas in former Soviet republics, Africa and elsewhere.

The publicly listed PetroChina and China National Oil and Gas Exploration and Development Corp., both subsidiaries of CNPC, will each provide 8 billion yuan ($1.1 billion, euro750 million) in cash for the planned 1,818 km (1,130-mile) pipeline, Xinhua News Agency said late Friday, citing an announcement from PetroChina.

The project was estimated to cost $7.3 billion (euro5 billion) in total, Xinhua said, but its report did not mention where the remaining funds would come from.

The pipeline will run through Uzbekistan and Kazakhstan before reaching northwest China, Xinhua said. The pipeline will be connected with China’s second West-to-East gas pipeline, which was expected to be operational by 2010 and reach eastern and southern China, including Shanghai and Guangdong province.

In July, CNPC signed a 30-year contract to buy gas from Turkmenistan, importing 30bn cubic meters of natural gas annually.

CNPC Exploration and Development Co. will build the pipeline in cooperation with two state-owned development companies in Kazakhstan and Uzbekistan, Xinhua said.—AP