Dear CHNG shareholders and friends

Amid the unrest of the global economy, China Natural Gas entered into 2009 and a new chapter of its development. As the increasingly severe energy shortage becoming the bottleneck of the world economy, the utilization of natural gas is bringing about a revolution in the energy history due to its economic, clean, and convenient nature, and is bound to make great contributions to the global environmental protection.

China Natural Gas is located in Shaanxi province which boasts extraordinarily affluent energy reserves. The province is not only blessed as the originating place of China’s 5000 years of civilization, but also with various and abundant natural resources, especially petroleum and natural gas. The company is well poised to capitalize on this unique advantage of right time, right place, and right people. The company currently possesses over 40% market share in Xian, owns its independent CNG tankers fleet, and is constructing a 150 million production capacity LNG plant in the city of Yulin known as “the Kuwait of China”, with potential CNG supply quota as high as 1 billion. The company has become the only integrated large scale natural gas processor and distributor in Shaanxi province with business lines spanning upstream gas procurement, civil gasification, CNG fueling station networks, CNG transportation / retail, as well as hybrid fuel vehicle remodeling, etc.

The prosperity of China Natural Gas indispensably depend on the support from our government, trust from our shareholders and customers, as well as the relentless efforts of all our diligent colleagues, for which I would like to express my most sincere appreciation. I will devote my whole life to this career and it is the best interpretation of my values and philosophy.

Marching forward with times, China Natural Gas is focusing its core businesses in the natural gas industry with strategic emphasis on operation strength and market expansion. We are constantly improving our internal control system, deepening budgeting management, strengthening treasury oversight, and ensure the financial safety. A conscientious decision making process ensured the optimization of our investment and development of key projects through rigorous investment management and decision implementation. We have been exerting full discretion on every cent of shareholder’s money and maximizing the return for our investors.

Amid the global financial turmoil, the natural gas industry continues to thrive due to its unique natures, and this brings to China Natural Gas unbounded and unprecedented business opportunities. Thus China Natural Gas is constantly building its strategic thoughts and operation philosophies to strengthen its core competitiveness, in order to take market initiatives and capitalize on the competitions to promote the company to a sustained growth. Hope and power derives from joined hearts and efforts. I hereby call upon all CHNG colleagues joining together with burning enthusiasm and full innovation spirit to unite and strive for the prosperity of China Natural Gas as leading multinational energy enterprise!

Qinan Ji,
Chairman & CEO
China Natural Gas, Inc.