China Natural Gas Announces Regional Price Adjustments for Pipeline Natural Gas and Vehicular Fuel

XI'AN, China, Oct. 21 /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 sales prices of both pipeline natural gas in Shaanxi Province and vehicular fuel in Xi'an have increased, according to a new notice from the Shaanxi Provincial Price Bureau and the Xi'an Municipal Pricing Bureau. The Shaanxi Provincial Price Bureau and Xi'an Municipal Pricing Bureau are responsible for developing and implementing pricing policies within the province and city, respectively.

According to the "Notice of Shaanxi Provincial Price Bureau on Adjusting the Natural Gas Price Within the Province," the sales price of pipeline natural gas in Shaanxi Province will increase by RMB 0.23 (US $0.03) per cubic meter to RMB 1.98 (US $0.30) per cubic meter for residential terminal use. The sales prices for commercial and industrial use will increase by RMB 0.35 and RMB 0.55 (US $0.05 and $0.08) per cubic meter, respectively. Additionally, the sales price of CNG for vehicular fuel in Xi'an, the capital of Shaanxi Province, was adjusted to the target ratio of 0.6:1 to the retail price of grade 90 gasoline. The retail price of CNG increased by RMB 0.9 (US $0.14) per cubic meter from RMB 2.65 (US $0.40) to RMB 3.55 (US $0.53) per cubic meter. The adjusted prices took effect on October 20, 2010.

Mr. Qinan Ji, Chairman and CEO of China Natural Gas, commented, "These pricing adjustments reflect the rapid development of the natural gas industry and will strengthen the relative competitiveness of natural gas compared to other energy sources, facilitating efficient resource allocation and market supply and improving prospects for the industry. The Company sees these price adjustments as a positive development, and we expect an increase in revenue and gross profit as a result of these changes, which will further support our expansion efforts throughout Shaanxi Province."

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 may contain "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. These forward-looking statements inherently involve certain risks and uncertainties, including, but not limited to, the risks that are detailed in the Company's filings with the Securities and Exchange Commission and available at http://www.sec.gov as well as the Company's website at http://www.naturalgaschina.com . You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. All forward-looking statements are qualified in their entirety by this cautionary statement. The Company is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

    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: [email protected]

    Investor Relations:
     Dave Gentry, U.S.
     RedChip Companies, Inc.
     Tel:   +1-800-733-2447, Ext. 104
     Email: [email protected]

     Jing Zhang, China
     RedChip Beijing Representative Office
     Tel: +86 10-8591-0635
     Web: http://www.RedChip.com

SOURCE China Natural Gas, Inc.