BEIJING, August 27 (RIA Novosti) - The China National Petroleum Corporation (CNPC) will finance the construction of a pipeline across the country, to supply Central Asian gas to China's south and east, the company said Monday.

The state-owned giant, China's largest oil and gas producer, said the Second West-East Pipeline Project had been approved by the Chinese government, and that CNPC would be the sole investor.

The 7,000 km (4,349 mile) pipeline with design capacity of 30 billion cubic meters per year is expected to go on-stream in 2010. Construction will start in 2008, the company said.

The pipeline will start in the province of Xinjiang in China's northwest, on the border with Central Asian states Kazakhstan, Kyrgyzstan and Tajikistan, and end at Guangzhou in the south, and Shanghai in the east, CNPC said.

The pipeline will pump natural gas from Central Asia, mainly from gas-rich Turkmenistan. In July, during Turkmen President Gurbanguly Berdymukhammedov's visit to China, CNPC and Turkmenistan's national gas company Turkmengaz signed a purchase and sale agreement on natural gas supplies.

Under the deal, the ex-Soviet country will supply 30 billion cubic meters of gas to China annually.

In its statement, CNPC said the pipeline could raise gas consumption in China by 2%, and highlighted the importance of reducing the heavily-polluted country's dependence on coal.

"In total, 76.8 million [metric] tons of coal combusted per year can be replaced by natural gas, meaning that the sulfur dioxide and carbon dioxide emissions can be reduced by 1.66 million tons and 150 million tons respectively," the company said.

CNPC has businesses ranging from oil and gas upstream and downstream operations to oilfield services, engineering and construction, petroleum equipment manufacture and supply.