Abstract: Entering the new century, China's gas industry will step into a developing stage, symbolized by West—east Pipeline Project, with multi-channel gas resources transforming coal gas into natural gas.The development of China's urban gas will be conformed to the market rules to solve the issues on the fund, equipment and management system. It is pointed out that the downstream market of gas is the base of gas industry development. The development format of our urban gas is discussed and the authors consider that after China's developing format has been set up, the expectant results can be gained.