Shell and Russian gas giant, Gazprom will take 45 percent in the project as part of the foreign consortium which also includes Stroitransga, Hong Kong & China Gas, with PetroChina holding the remainder. In addition to the construction of the trunkline from Xinjiang to Shanghai, the deal will also involve exploration and development of gas fields in the Xinjiang Uighur autonomous region.

The consortium has not officially confirmed the huge project, which has strong backing from the Chinese government and is estimated to cost $US18 billion.

American companies are also keen to participate in the project and reports of the initial deal hinted ExxonMobil might miss out on the huge project. However media reports have it that Exxon is now expected to be offered a role in the project in the next few weeks.

Late last year one of China's richest provinces in the south, Guangdong, invited the North West Shelf JV, where Shell is an equal partner, to tender for a $20 billion contract to supply LNG for a yet unbuilt receival terminal. The Joint Venture was one of seven consortia asked to compete to supply three million tonnes under a potential 20 year contract period.