**AGREEMENT**





This
      agreement (this " Agreement ")
      is
      made and entered into as of May 15, 2007, by and among Sino
      Gas International Holdings, Inc. ,
      a Utah
      corporation (the " Company "),
      Vision Opportunity Master Fund, Ltd., a limited liability company formed under
      the laws of the Cayman Islands (“ Vision ”
and,
      together with the Company, the “ Parties ”).





This
      Agreement is being entered into with reference to (a) the Series B Convertible
      Preferred Stock Purchase Agreement dated as of September 7, 2006 among the
      Parties and the other purchasers named therein (the " Purchase
      Agreement ")
      and
      (b) the Series J Warrant to purchase 1,993,355 shares of common stock of the
      Company (the “ Common
      Stock ”),
      issued to Vision by the Company on September 7, 2006 under the number W-J-06-01
      and expiring on September 7, 2007 (the “ Series
      J Warrant ”).





The
      Company and Vision hereby agree as follows:





1.
            Definitions.





Capitalized
      terms used and not otherwise defined herein shall have the meanings given such
      terms in the Purchase Agreement or the Series J Warrant.





“Exercise
      Date” shall mean May 15, 2007.





2.
            Early
                Exercise of Series J Warrant and Consideration Therefor.





On
      the
      Exercise Date, Vision shall exercise its right under the Series J Warrant (as
      such right has been amended by this Agreement) to purchase 1,094,891 shares
      of
      Common Stock at an exercise price of $2.74 per share in an amount corresponding
      to a total purchase price of $3,000,001.34 (the “ Purchase
      Price ”;
      such
      1,094,891 shares, the “ Exercise
      Shares ”).
      In
      consideration of Vision’s early exercise of the Series J Warrant (as such right
      has been amended by this Agreement), the Company shall issue to Vision a new
      warrant to purchase 1,094,891 shares of Common Stock in a form and containing
      terms substantially identical to the form and terms of the warrant attached
      hereto as Exhibit
      1 (the
“ Series
      E Warrant ”).
      Vision shall retain its right under the Series J Warrant to purchase an
      additional 898,464 shares of Common Stock under the terms set forth therein
      (as
      such right has been amended by this Agreement), which right shall be evidenced
      by a new warrant certificate issued to it by the Company (the “ New
      Series J Warrant ”
and
      together with the Series E Warrant, the “ Warrants ”).
      The
      Warrants and the shares of Common Stock issuable upon exercise of the Warrants
      are sometimes collectively referred to herein as the “ Securities .”





3.
            Closing.





On
      the
      Exercise Date, Vision shall wire the Purchase Price according to the written
      instructions provided by the Company as set forth on Exhibit
      2 attached
      hereto, and the Company shall deliver to Vision the Exercise Shares, the Series
      E Warrant and the New Series J Warrant.




-1-




4.
            Representations
                and Warranties of the Parties.





(a)
      The
      Company has the requisite power and authority to enter into and perform this
      Agreement and to issue and sell the Securities in accordance with the terms
      hereof. Vision has the requisite power and authority to enter into and perform
      this Agreement and to purchase the Securities being sold to it hereunder. The
      execution, delivery and performance of this Agreement by each Party and the
      consummation by it of the transactions contemplated hereby have been duly
      authorized by all necessary corporate action, and no further consent or
      authorization of such Party or its Board of Directors, stockholders, members
      or
      partners, as the case may be, is required.





(b)
      The
      Securities to be issued at the closing hereunder have been duly authorized
      by
      all necessary corporate action on behalf of the Company. When the shares of
      Common Stock issuable upon exercise of the Warrants are issued in accordance
      with the terms of the Warrants, such shares will be duly authorized by all
      necessary corporate action and validly issued and outstanding, fully paid and
      nonassessable, and the holders thereof shall be entitled to all rights accorded
      to a holder of Common Stock.





(c)
      This
      Agreement constitutes a valid and binding agreement and obligation of each
      Party
      enforceable against such Party in accordance with its terms, subject to
      limitations on enforcement by general principles of equity and bankruptcy or
      other laws affecting the enforcement of creditors' rights
      generally.





(d)
      The
      Parties are executing and delivering this Agreement in accordance with and
      in
      reliance upon the exemption from securities registration afforded by Rule 506
      of
      Regulation D (“Regulation D”) as promulgated by the United States Securities and
      Exchange Commission (the “Commission”) under the Securities Act of 1933, as
      amended (the “Securities Act”) or Section 4(2) of the Securities
      Act.





(e)
      The
      Company represents that the offer, issuance and sale of the Securities is exempt
      from registration under the Securities Act pursuant to an exemption
      thereunder.





(f)
      Based
      in material part upon the representations herein of Vision, the Company has
      complied and will comply with all applicable federal and state securities laws
      in connection with the offer, issuance and sale of the Securities hereunder.
      Neither the Company nor anyone acting on its behalf, directly or indirectly,
      has
      taken or will take any action so as to exclude the issuance and sale of any
      of
      the Securities from exemption from registration under the Securities Act and
      applicable state securities laws, including by selling, offering to sell or
      soliciting offers to buy any of the Securities or securities similar thereto,
      or
      soliciting offers with respect thereto from, or entering into any preliminary
      conversations or negotiations relating thereto with, any person and neither
      the
      Company nor any of its affiliates, nor any person acting on its or their behalf,
      has engaged in any form of general solicitation or general advertising (within
      the meaning of Regulation D under the Securities Act) in connection with the
      offer or sale of any of the Securities.




-2-




(g)
      Neither the Company, nor any of its affiliates, nor any person acting on its
      or
      their behalf, has directly or indirectly made any offers or sales of any
      security or solicited any offers to buy any security under circumstances that
      would cause the offering of the Securities pursuant to this Agreement to be
      integrated with prior offerings by the Company for purposes of the Securities
      Act which would prevent the Company from selling the Securities pursuant to
      Rule
      506 under the Securities Act or any applicable exchange-related stockholder
      approval provisions, nor will the Company or any of its affiliates or
      subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings and the Company does not have
      any registration statement pending before the Commission or currently under
      the
      Commission’s review.





(h)
      The
      Company understands and acknowledges that it has an obligation to issue the
      shares of Common Stock issuable upon exercise of the Warrants in
      accordance with this Agreement and the Warrants and that such obligation is
      not
      affected, reduced or eliminated by any dilutive effect that such issuance may
      have on the ownership interest of other stockholders of the
      Company.





(i)
      Vision is acquiring the Warrants solely for its own account for the purpose
      of
      investment and not with a view to or for sale in connection with distribution.
      Vision does not have a present intention to sell the Warrants, nor a present
      arrangement (whether or not legally binding) or intention to effect any
      distribution of the Warrants to or through any person or entity; provided , however ,
      that by
      making the representations herein and subject to Section 4(l) below, Vision
      does
      not agree to hold the Securities for any minimum or other specific term and
      reserves the right to dispose of the Securities at any time in accordance with
      federal and state securities laws applicable to such disposition. Vision
      acknowledges that it is able to bear the financial risks associated with an
      investment in the Warrants and has sufficient knowledge and experience in
      investing in companies similar to the Company so as to be able to evaluate
      the
      risks and merits of an investment in the Company.





(j)
      Vision is an “accredited investor” as defined in Regulation D, is not required
      to be registered as a broker-dealer under Section 15 of the Securities Exchange
      Act of 1934, and is not a broker-dealer.





(k)
      Vision acknowledges that it has had full access to all the information it
      considers necessary or appropriate to make an informed investment decision
      with
      respect to the Exercise Shares and the Warrants (and Common Stock issuable
      upon
      exercise thereof) to be issued under this Agreement.





(l)
      Vision understands that the Securities must be held indefinitely unless they
      are
      registered under the Securities Act or an exemption from registration is
      available, acknowledges that Vision is familiar with Rule 144 of the rules
      and
      regulations of the Commission, as amended, promulgated pursuant to the
      Securities Act (“Rule 144”), and understands that Rule 144 permits resales only
      under certain circumstances. Vision understands that to the extent that Rule
      144
      is not available, it will be unable to sell any Exercise Shares, Warrants or
      shares issuable upon exercise thereof without either registration under the
      Securities Act or the existence of another exemption from such registration
      requirement.




-3-




5.  Registration
      Rights .
      The
      parties agree that the shares of Common Stock issuable
      upon exercise of the Warrants are entitled to all of the benefits of the
      registration rights granted by the Company pursuant to that certain Registration
      Rights Agreement dated as of September 7, 2006 by and among the Parties and
      the
      other purchasers listed
      on Schedule I thereto (the “ Registration
      Rights Agreement ”)
      and the shares of Common Stock issuable upon exercise of the Warrants shall
      constitute “Registrable Securities” pursuant to the Registration Rights
      Agreement. The foregoing sentence notwithstanding, the Company is not obligated
      at any time to register any shares the registration of which, at such time,
      would entail a violation of Rule 415 under the Securities Act (“Rule 415”) or
      the guidance of the Commission in connection therewith.





6.  Governing
      Law; Jurisdiction. This Agreement shall be governed by and interpreted in
      accordance with the laws of the State of New York without giving effect to
      conflicts of law principles that would result in the application of the
      substantive laws of another jurisdiction. Each Party (i) hereby irrevocably
      submits to the jurisdiction of the United States District Court sitting in
      the
      Southern District of New York and the courts of the State of New York located
      in
      New York County for the purposes of any suit, action or proceeding arising
      out
      of or relating to this Note and (ii) hereby waives, and agrees not to assert
      in
      any such suit, action or proceeding, any claim that it is not personally subject
      to the jurisdiction of such court, that the suit, action or proceeding is
      brought in an inconvenient forum or that the venue of the suit, action or
      proceeding is improper.





7.  Counterparts.
      This Agreement may be executed by facsimile signature or electronic transmission
      in “pdf” format and in counterparts, each of which shall be deemed an original,
      but all of which together shall constitute one and the same instrument.





8.  Survival.
      The representations and warranties of the Parties shall survive the closing
      hereunder.







[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]




-4-





IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized persons as of the date first indicated
      above.




**SINO
              GAS
              INTERNATIONAL HOLDINGS, INC.**By:
            /s/ Sino
              Gas
              International Holdings, Inc.


**VISION
              OPPORTUNITY MASTER FUND, LTD.**By:
            /s/ Vision
              Opportunity Master Fund, Ltd.





-5-




**Exhibit
      1**





**Form
      of Series E Warrant**








-6-




**Exhibit
      2**





**Wiring
      Instructions for Purchase Price**






-7-