Abstract: Shanghai is a city which made the earliest use of gas in China, and has a history of 137 years of using man made coal gas. Development project of Pinghu Oil/gas Field in the Xihu Sag, East China Sea began to build up in 1996, has been accomplished three years later. Since April 28, 1999, natural gas of Pinghu Oil/gas Field has been entered into residential household of Pudong New District. Pudong New District has realized gas popularization before October 1, 2000. Meanwhile, other districts of Shanghai city partly made use of natural gas of Pinghu Oil/gas Field. Gas supply of Shanghai have been entered a new structural regulation stages. There are 70×10⁴ residential households of gas consumer in Shanghai, in which 53×10⁴ residential households of Pudong New District, 20×10⁴ residential households of other districts by the time July,2002. Additionally, 4000 commercial enterprises and 100 industrial unit of Pudong New District has made use of natural gas of Pinghu Oil/gas Field. In order to await the arrival of "west gas" and "Gas expanded utilization of East China Sea", Shanghai government department has formulated short middle term plan for gas utilization. Annual gas consumed volume will be forecasted to be 30×10⁸m³ of 2005, 70×10⁸m³ of 2010. Gas utilization proportion increased from 1% at present to 5%. Management will approximately reached the level of moderate developed country. Gas popularization of the entire city of Shanghai will be realized in 2010. This paper points out that highly valueless of government department, gas supply guarantee from the reaches resource, tremendous requirement of natural gas, good system association of gas industry, consciousness of environment protection, are all good condition for natural gas industrial development in Shanghai.