China will raise its natural gas supply to as much as 420 billion cubic meters per year by 2020 amid rising demand due to urbanization, a government statement said on Wednesday.

The increased supply will cater to the rising demand for natural gas in people's daily lives, schools, nursing homes, home heating, as well as in buses and taxis, a statement on the central government website said.

The supply increase is also driven by the nation's efforts to mitigate air pollution stemming from an over-reliance on coal, the statement said.

To expand natural gas production, investment in gas storage facilities as well as their construction and operation will be open to all market players, the statement said.

Meanwhile, companies will also have the option to issue bonds to raise capital for the construction of storage facilities. The government will offer favorable land policies for storage facility projects, the statement said.

Data showed that natural gas consumption in China hit nearly 170 billion cubic meters last year.