China Natural Gas Announces Completion of First LNG Fueling Station in Shaanxi Province

XI'AN, China, Sept. 2 /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 that the Company has completed construction of a liquefied natural gas (LNG) fueling station in Shaanxi Province. The station will officially begin operations on September 9, 2010 and marks the Company's first development of an LNG fueling station in China.

The new station, located in Hongqing District, Xi'an, is the first LNG fueling station in Shaanxi Province. The LNG fueling station has a designed fueling capacity of approximately 50,000 cubic meters per day. This first station will initially serve as a working model, which will be crucial to showcase the market potential of LNG to future users. China Natural Gas is also working with renowned truck manufacturers, which the Company believes will accelerate the process of acceptance of LNG fuels into the marketplace.

CEO and Chairman Mr. Qinan Ji remarked, "We are very pleased to share this exciting news. The opening of our first LNG fueling station is a major milestone for our Company that underlines the growing recognition of LNG as a viable clean-energy fuel source for vehicles. Compared to gasoline and diesel, LNG is a more cost-efficient, environmentally friendly fuel source that can provide significant cost-saving benefits to fueling station operators and consumers. LNG-powered cars can save consumers more than 40% on fuel costs compared to diesel cars. Furthermore, LNG fueling stations require relatively small initial investments and shorter construction periods, and the cost of converting a car to run on LNG is moderate."

Mr. Ji continued, "The Chinese government plans to invest approximately $700 billion in alternative energy projects over the next 10 years, and we expect natural gas to be a key component of the national energy strategy. We will continue to develop our business to capitalize upon new opportunities in China's rapidly growing natural gas market."

Energy research and consulting group Wood Mackenzie forecasts that LNG consumption in China could reach as much as 46 million metric tons per year by 2020, up from an earlier estimate of 31 million metric tons. In the month of June, total LNG purchases in China reached 741,732 tons, representing an increase of 58% compared to the same period a year ago.

About China Natural Gas, Inc.

China Natural Gas transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in China's Shaanxi and Henan Provinces. The Company owns approximately 120 km of high-pressure pipelines and operates 28 CNG fueling stations in Shaanxi Province and 12 CNG fueling stations in Henan Province. China Natural Gas' four primary business lines include: (1) the distribution and sale of CNG through Company-owned CNG fueling 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 CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; and (4) the conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles through its auto conversion division.

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 fourth 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.
     Jackie Shi
     IR Director
     Tel:   +86-29-8832-3325 x922
     Cell:  +86-139-9287-9998
     Email: [email protected]

    Investor Relations:

     Alexander Nachman
     RedChip Companies, Inc.
     Tel:   +1-800-733-2447 x118
     Email: [email protected]
     Web:   http://www.RedChip.com

SOURCE China Natural Gas, Inc.