The west of China is very rich in natural gas resources. It has 75% of total natural gas resources and 80% of the proven reserves in China. The total proven reserves of natural gas in the west of China have reached 1 311 billion cubic meters, which makes it capable to provide 15 billion cubic meters of natural gas each year over a long period of time. Such abundant natural gas reserves in Tarim Basin make it economic to transport natural gas from the west to the east of China. It is expected that the two large natural gas fields, which were recently discovered and evaluated, will rapidly increase the area s proven reserves of natural gas by about 500 billion cubic meters.Gas fields in the area have good characteristics such as large reserves per square kilometre, high, output per gas well and low production costs. On the other hand, the economy in the Yangtze River Delta in east of China has already been developed. The Yangtze River Delta faces lack of energy with only 13% of self-sufficiency. At the current stage, 76% of the overall energy consumption is provided by coal which causes serious environmental pollution in the cities. With increasing demand for environment protection, natural gas has a great potential in energy markets. It is estimated that the demand for natural gas will be 25.3 billion cubic meters by the year 2010. There are two options for transporting natural gas from the west to the east. One option is only transporting natural gas produced by the Tarim Basin to the east. The annual transporting volume of the natural gas will be increased from 10 billion cubic meters in the first year to 15 billion cubic meters in the 8th year. The another option is transporting natural gas produced by several basins in the western area to the east.The annual transporting volume of natural gas will be increased from 15 billion cubic meters in the first year to 23 billion cubic meters in the 8th year. The second option has many advantages compared with the first one although both options have reasonably good economic returns. The selling price of the transported natural gas at Shanghai gate terminal is very competitive at 1.2〜1.3 RMB per cubic meter. Once the project to transport natural gas from the west to the east is commenced, it will bring significant benefits for both eastern and western areas.