Workers of PetroChina Co check facilities in Shanxi province. [Chen Yuanzi for China Daily]

The China National Petroleum Corporation, PetroChina, has reportedly decided to back-out of its contract with Russian gas giant Gazprom in the construction of a natural-gas pipeline.

The pipeline, the contract for which was signed in December, was to be built through Xinjiang.

Reports out of Russia are suggesting the deal has been scuttled because of the high prices being demanded by Gazprom, as well as the slowdown in demand for natural gas here in China.

The cancelling of the pipeline project has reportedly not affected the construction of a different pipeline from Russia coming into China, known as the eastern route.

It's construction began last month.