China's state energy giant Sinopec Group envisages investing 70 billion yuan ($11.3 billion) to build the country's largest coal-to-gas project in 8-10 years to meet a rising demand for natural gas, a newspaper said on Sunday.

Coal-to-gas production facilities in Zhundong in China's northwestern region of Xinjiang will have annual production capacity of 8 billion cubic metres of gas (bcm), the Xinjiang Daily said, citing Sinopec Xinjiang Energy Chemical, a unit of Sinopec Group, China's second biggest energy company.

Coal extracted from two mines in Zhundong will be used to feed coal-to-gas production facilities nearby, the daily said. The coal mines have annual production capacity of 15 million tons each.

The natural gas produced will be transmitted through Sinopec Group's 30 bcm/year pipeline stretching from Xinjiang to Guangdong province in south China to Zhejiang province in east China.

The Xinjiang-Guangdong-Zhejiang pipeline measuring 7,927 km (4,925 miles) gives Sinopec Group a substantial foothold in China's gas distribution market.