Feb. 1 (Bloomberg) -- Japan asked China to halt any new production of gas from a field in the East China Sea claimed by both countries, Chief Cabinet Secretary Yasuhisa Shiozaki said.

China has started supplying gas from the Chunxiao field to cities in the southeastern province of Zhejiang, the Ta Kung Pao newspaper reported. Phase one of the project started production in July last year, the Hong Kong paper said, citing a Zhejiang government report. Gas supplies began in September, it said.

Japan's government asked for an explanation, and China this morning said the situation at the field was unchanged, ``an answer that we don't understand,'' Shiozaki said today at a press conference in Tokyo. ``Since Japan and China are discussing joint development, we want an answer we can understand. We have strong concerns about this.''

China and Japan, Asia's largest energy users, have failed to resolve the dispute over the field, which may contain as much as 200 billion cubic meters of natural gas, after a series of talks in the past five years. Environmental concerns and increases in crude oil prices prompted the two nations to switch to greater use of cleaner-burning fuels like gas.

Japan's government has repeatedly protested China's natural gas production in the disputed areas. On Nov. 8, Japan lodged a protest against China's gas development at the Pinghu field in the area, after it discovered China's gas production.

`Our Waters'

China Foreign Ministry Spokeswoman Jiang Yu refused to comment on the status of production at the Chunxiao field. No date has been set for the next round of negotiations, she said.

``It is important for both nations to work together to overcome this dispute,'' she said at a press conference in Beijing. ``That said, we believe all drilling conducted by China is in our territorial waters.''

The Chunxiao field is located 5 kilometers (3.1 miles) away from the ``middle line'' claimed by Japan, which China's government doesn't recognize. Japan regards the sea border to be halfway between the countries' shores, while China says its territory extends to the end of the continental shelf.

Cnooc Ltd., a unit of China National Offshore, said in August 2005 it plans to deliver the gas from the Chunxiao field, via pipelines to the city of Ningbo in the eastern province of Zhejiang. The Chunxiao project, which extends over about 22,000 square kilometers, can produce as much as 2 billion cubic meters of gas a year, the company said then.

`More Dialogue'

The two nations have held three sets of talks to discuss issues including the development of gas and oil deposits in the disputed areas since late last year.

``We've made some progress through the meetings,'' Japan's Vice Trade Minister Takao Kitabata told reporters in Tokyo today, without elaborating. The countries will hold ``several more'' rounds of talks.

``This will be resolved through more dialogue between Japan and China,'' Kitabata said.

To contact the reporters on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

Last Updated: February 1, 2007 04:21 EST