BEIJING (Reuters) - General Electric's (GE.N: Quote, Profile, Research) oil and gas division has won a contract to provide engines for the expansion of China's west-east gas pipeline capacity to 17 billion cubic meters, the firm said on Friday.

The deal, worth over $196 million, covers gas turbines, compressors and installation services for 12 new compression stations, the company said in a statement.

The 4,000-km (2,500 mile) pipeline built by domestic major PetroChina (PTR.N: Quote, Profile, Research)(0857.HK: Quote, Profile, Research) ferries gas from the deserts of western Xinjiang to eastern boomtowns, and currently has annual capacity of 12 billion cubic meters.

PetroChina officials have said that in addition to the capacity expansion, the firm is considering a second cross-country link. It would probably need feedstock from other countries' gas fields, however.

Equipment for the first eight stations would be shipped and installed this year, with the remaining four shipped by the end of 2008. All 12 will be in operation by September 2009, GE said. China has said it wants to expand the portion of its energy provided by relatively clean-burning natural gas to 8 percent by 2010, from 3 percent now. But rising global prices for natural gas might lead to a scaling back of plans, analysts say.