China Natural Gas Provides Updates for Power Supply Agreement for Future LNG Plant

China Natural Gas Provides Updates for Power Supply Agreement for Future LNG
Plant
Shaanxi Province Doubled the Investment in Supporting Company's LNG Initiative
with Funding for Electrical Station

NEW YORK, Aug. 17 /PRNewswire-Asia/ -- China Natural Gas, Inc. ("China
Natural Gas" or the "Company") (Nasdaq: CHNG), a leading provider of
compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for
industrial, commercial and residential use in Xi'an, China, today announced
the updates for the power supply agreement with Yulin Municipal Government and
Shaanxi Provincial Government.
As mentioned in the previous press release on March 25th, 2009, China
Natural Gas has reached a power supply agreement with the municipal government
of Yulin and Shaanxi Provincial Government. In this latest agreement, Yulin
Electric Power Supply Bureau offers to invest RMB40 million (approximately
US$5.9 million), which doubled the amount of its previously promised funding,
to build an integrated 110KV transformer substation to ensure the supply of
electricity for the Company's LNG plant. The commitment letter from Yulin
Electric Power Supply Bureau states that because China Natural Gas's LNG
initiatives are important at both provincial and municipal levels, the Bureau
has made decision to add more investment in this built-out to guarantee to
stability and capacity of the electricity demand for this key project.
Mr. Qinan Ji, Chairman and CEO of China Natural Gas commented, "We are
very glad to be informed this news by the Yulin government, and very delighted
to share with our investors with this update. This doubled investment from the
local government to build power facilitates for China Natural Gas demonstrates
the government's continued support in implementing our LNG project. Having
established a long-trusted safety record, with dominant market leading
position, strong brand and broad market coverage, China Natural Gas has been
recognized by the local government as a key player in the development of local
economy too. More importantly, this RMB 40 million investment will further
save our cost in building such transformer substation, which provides us with
more financial flexibility in the future."
Mr. Ji continued, "We have received much positive news from the government
in supporting the natural gas industry. Currently, the pricing mechanism of
natural gas in China is influenced more by government policies than market
forces. In early August, research from the State Information Center indicated
that natural gas prices would soon be raised. And, because the price of
natural gas in China is currently much lower than that of the international
market, it is reasonable to estimate that the Chinese government is preparing
to raise natural gas prices closer in line with global prices. We are
confident that with the strong support from the government, we will continue
our commitment to grow our business toward our goal of becoming the leader in
China's fast growing natural gas market and we are excited about our ability
to deliver sustained, strong financial results and to ultimately reward our
supportive shareholders with greater share value."
About China Natural Gas, Inc.
The Company transports, distributes and sells natural gas to commercial,
industrial and residential customers through its natural gas pipeline networks
in China'sXi'an area, including Lantian County and the districts of Lintong
and Baqiao, in Shaanxi Province. The Company owns approximately 120 km of
high pressure pipelines in Xi'an, Shaanxi Province and, as of March 31, 2009,
operates 23 CNG fuelling stations in Shaanxi Province and 12 CNG fuelling
stations in Henan Province.
The Company's four primary business lines include: (1) the distribution
and sale of CNG through Company-owned/leased CNG fuelling stations for hybrid
(natural gas/gasoline) powered vehicles; (2) the installation, distribution
and sale of piped natural gas to residential, commercial and industrial
customers through Company-owned pipelines; (3) the distribution and sale of
gasoline through Company-owned/leased CNG fuelling stations for hybrid
(natural gas/gasoline) powered vehicles; and (4) the conversion of gasoline-
fuelled vehicles to hybrid (natural gas/gasoline) powered vehicles through its
auto conversion division.
SAFE HARBOR: FORWARD-LOOKING STATEMENTS
This press release includes statements that may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements.
For example, statements about the future plans and goals of the JV with CNPC
and its prospects are forward looking and subject to risks. China Natural
Gas,
Inc. may also make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and
8-K, in its annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or employees
to third parties. Statements that are not historical facts, including
statements about the Company's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. A number of important factors could cause actual
results to differ materially from those contained in any forward-looking
statement. Potential risks and uncertainties include, but are not limited to,
risks outlined in the Company's filings with the U.S. Securities and Exchange
Commission, including its registration statements on Forms S-1 and S-3, in
each case as amended. The Company does not undertake any obligation to update
any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration. Any public offering of securities to be
made in the United States will be made by means of a prospectus that may be
obtained from the issuer or selling security holder and that will contain
detailed information about the company and management, as well as financial
statements.
For more information, please contact:

China Natural Gas Inc.
Jacky Shi
IR Director
Tel: +86-29-8832-3325 x922
Cell: +86 139-9287-9998
Email: yjshi@naturalgaschina.com

ICR, Inc.
Michael Tieu
Tel: +86-10-6599-7960
Email: Michael.Tieu@icrinc.com

SOURCE China Natural Gas, Inc.

Jacky Shi, IR Director of China Natural Gas Inc., +86-29-8832-3325 x922, +86
139-9287-9998, yjshi@naturalgaschina.com, or Michael Tieu of ICR, Inc.,
+86-10-6599-7960, Michael.Tieu@icrinc.com