New gas connections next year
The first Gas to the West connections will take place next year, Enterprise Minister Arlene Foster said.
Around 40,000 homes and businesses will be linked to the network through a major extension of the pipeline from Craigavon. The scheme will cost around £250 million, including a grant of up to £32.5 million from the Stormont Executive.
The project will be built and operated by Mutual Energy and Scotia Gas Networks (SGN).
Ms Foster said: "This hugely important project will extend the natural gas network to Strabane, Omagh, Enniskillen, Derrylin, Dungannon, Coalisland, Cookstown and Magherafelt.
"It will bring greater energy choice for consumers and increase the potential for businesses and the public sector to use a cleaner, more efficient fuel."
Construction work will begin in the middle of this year and the first connections will happen next year in the Strabane area.
A pipeline running from Portadown will link Magherafelt, Cookstown, Coalisland, Dungannon, Omagh and Enniskillen.
The final phase of the project will involve extending the pipeline from Enniskillen to Derrylin.
The main networks will be completed by the end of 2017, Ms Foster said.
"With natural gas being the cleanest burning fossil fuel, extending the gas network will help us achieve our greenhouse gas emissions target."
Jenny Pyper, chief executive of the Utility Regulator, which ran the competition to award the licences to build the network, said: "Natural gas provides an affordable, cleaner and convenient form of energy and this is a further vote of confidence in the natural gas industry. It is also a welcome new investment in our energy infrastructure.
"We look forward to work commencing as soon as possible so that natural gas can start flowing to customers."
SGN's chief executive John Morea said the project would extend the significant benefits of natural gas availability to thousands of homes and businesses in the west of Northern Ireland.
"Our focus is now firmly on building a modern natural gas network and providing the infrastructure to safely transport and deliver gas to these communities."