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Chinese Vice Premier Li Keqiang attended the kick-off ceremony announced the start of the construction.
The pipeline, the second after the first West-East natural gas transfer project, will cross 15 regions and carry 30 billion cubic meters of natural gas every year to Zhejiang, Shanghai, Guangdong and Hong Kong, among others.
When visiting the construction site, Li said the pipeline under construction is the country's most expensive energy project in decades and the world's longest natural gas pipeline. It is of great importance to ensuring China's energy security, coordinating regional economic development, deepening the ties between Hong Kong and inland provinces and promoting economic growth.
The 8,704 km pipeline will be made up of one trunk line and eight sub-lines. Construction of the west segment of the pipeline was started in February 2008 and is expected to be completed by the end of the year. The whole line will be operational by the end of 2011.
As China battles the financial crisis and expands its domestic demand, the second West-East gas pipeline project is a landmark project that will boost people's confidence to overcome the crisis, said an official with the National Development and Reform Commission.
The total investment of the second West-East gas pipeline was 142.2 billion yuan (20.82 billion U.S. dollars). The eastern segment stretches 2,472 km, with an investment of 93 billion yuan.
The government approved the east segment project during an executive meeting of the State Council or the Cabinet last November, in a hope to ease natural gas shortage, boost economic development and popularize utilization of clear energy.
Zhou Dadi, a researcher with the Energy Research Institute of National Development and Reform Commission said the construction of the gas pipe is essential for China to increase gas resources and ensure energy security.
It is hoped that construction will boost consumption and increase investment amid a world economic downturn, Zhou added.
It is estimated that investment will top 300 billion yuan in other relevant industries, including machinery production, electric technology, and construction material sectors.
Dong Xiucheng, professor with China University of Petroleum said this project will help China increase clean energy consumption.
In China, coal makes up 70 percent of the total energy consumption, 40 percentage points higher than the world average. Natural gas consumption only accounts for three percent of the total.
The completion of the second pipeline is expected to save 11.06million tonnes of coal every year.
The first West-East gas pipeline was finished in 2004. It has provided 42 billion cubic meters of gas to 3,000 factories and nearly 200 million people over the past five years
Wang Yang, secretary of the Guangdong Provincial Committee of the Communist Party of China, and Donald Tsang, chief executive of the Hong Kong Special Administrative Region, also attended Saturday's ceremony.