While the nation progresses with plans to build 10 Liquefied Natural Gas (LNG) terminals, China Petroleum & Chemical (Sinopec) will purchase LNG from US energy major ExxonMobil.
The Asian refiner will buy 2 million metric tons of LNG a year from a $12.5 billion Exxon-led project in Papua New Guinea as China seeks to cut its reliance on more polluting coal.
The gas secured under Sinopecs deal will be delivered to the Qingdao terminal in eastern China.
China, which received its first LNG cargo in May 2006, plans to build more than 10 terminals on the east coast to meet a government target to double the use of natural gas in five years by 2010.
Sinopecs rival PetroChina signed an estimated AU$50 billion (30.5 billion) agreement in August to buy LNG from Exxons Gorgon project in Australia.
In June Exxon said it would begin talks to supply three Asian customers with LNG from the Papua New Guinea venture.
The project plans a two-production-unit gas liquefaction plant near Port Moresby with gas sourced from the South Pacific nations highlands. The project will have a capacity to produce 6.3 million tons of LNG a year.