Sinopec is China’s second-largest oil and gas producer and the world's second-biggest crude oil refiner.

The pipeline is expected to transport up to 1.05 trillion cubic feet of gas generated from the nation’s vast coal deposits, although the pipeline could eventually also transport conventional, shale and coal seam gas.

Five branch pipelines will also be built.

Last year Sinopec announced the plan to build a $US10 billion, 282 billion cubic feet per annum (780 million cubic feet per day) coal-to-gas plant in Xinjiang, with the company aiming to use the largely untested technology to meet Chinese government mandates demanding the increased use of gas in a bid to tackle the nation’s intractable pollution problems.

Coal gasification subjects coal to high heat and pressure to turn it into synthesis gases, which are processed into natural gas and other by-products.

The country's National Energy Administration last year warned operators again "blindly" developing projects to turn coal into synthetic fuel, underlining the requirements needed for regulatory approval as companies rush into investments that are costly and might harm the environment.

Environment groups have claimed the technology, which is similar to that used to make oil from coal in South Africa, will generate a large amount of carbon dioxide and consume vast volumes of water.

Sinopec says the energy efficiency in coal consumption would double to 60%, so less coal will be consumed and less pollution would be emitted overall, to generate the same amount of energy, however some groups claim CTG uses more coal than regular coal burning to produce the same amount of power.

China is 90% coal self-sufficient but imports almost 60% of its oil and a quarter of its gas usage.

There could be 50 CTG projects operational in China by 2025, producing 8Tcf of gas, emitting one billion tonnes of CO2, or around 12.5% of China's CO2 emissions in 2011 and twice as much CO2 as China is seeking to cut from its coal mining interests by 2020.

Several projects have suggested they will develop carbon capture and storage projects.

There are only two existing coal-to-gas pilot projects in China today – Datang's 141Bcf per annum Inner Mongolia Keqi demonstration plant and Qinghua's Xinjiang plant.

There are around 48 more projects in the pipeline. Three are already under construction, 16 that have been given the green light to go ahead, and 11 are in the approvals process.

Last year a UBS report predicted that there would be a 5-7 year boom in CTG projects in China.

Beijing has approved a large number of such projects that are projected to see gas output rise from 300MMcf this year to almost 2Tcf in 2020, although not all projects are guaranteed to be built.

A peer-reviewed modelling study in the journal Energy Policy from in 2013 found that CTG lifecycle CO2 emissions are 20-108% higher than coal when syngas is used for cooking, heating, and power generation.

Researchers at Tsinghua University have also warned that CTG technology may not effectively lower the emission of air pollutants such as nitrogen oxide, the main contributor to China's smog problem.

Because 5-6t of water is needed for each 35MMcf of syngas produced, China has mandated that plants only be developed in areas with sufficient water resources.

Greenpeace says around 80% of the predicted output of syngas from the 50 plants will come from areas of high or extremely high water risk.