Chinese oil and gas company China National Petroleum Corporation said that it had started construction of a natural gas pipeline in eastern Shandong province.

The 1,067km line, with a capacity of 11 billion cubic metres per year, would enable the company to ship gas from central Shandong to cities including coastal Qingdao and Weihai in the east, according to Reuters.

The pipeline, expected to be fully operational by late 2010, is expected to cost about 9 billion yuan ($1.32bn), CNPC said.

The pipeline will enable CNPC to distribute more natural gas from domestic fields or those from central Asia in the booming coastal province, solidifying its dominance in the domestic gas market, reported Reuters.