**Exhibit
      10.3**




**EQUITY
      PLEDGE AGREEMENT**


**(English
      Translation)**




This
      Equity Pledge Agreement (hereinafter this “ Agreement ”)
      is
      dated August 17, 2007 and effective as of March 8, 2006, and is entered into
      between Shaanxi
      Xilan Natural Gas Equipment Co.,Ltd. ,
      a
      company incorporated under the laws of the PRC (“ Pledgee ”),
      and
      each of the shareholders of XXNG listed on Appendix 3 and the signature pages
      hereto (collectively, the “ Pledgors ”),
      and Xi'an
      Xilan Natural Gas Co.,Ltd. ,
      (hereinafter “ XXNG ”),
      a
      company with joint stock limited liability registered in Xi’an,
      China.




**RECITALS**




I.  The
      Pledgee, a joint stock limited liability company registered in Xi’an, Shaanxi
      Province, the People’s Republic of China (hereinafter “ PRC ”),
      has
      been licensed by the PRC relevant government authority to carry on the business
      of natural gas equipment purchase and sale (except the items not obtained the
      specified approval).





II.  Each
      Pledgor is a citizen of PRC. The Pledgors collectively own over 50% of the
      outstanding Equity Interest of XXNG.





III.  Pledgee
      and XXNG executed a Consulting Services Agreement (hereinafter “ Consulting
      Services Agreement ”
or
      “ Services
      Agreement ”)
      concurrently herewith, and such agreement has a term of 10 years. Based on
      this
      agreement, XXNG shall pay technical consulting and service fees (hereinafter
      the
“ Consulting
      Services Fees ”
or
      “ Services
      Fees ”)
      to
      Pledgee for offering consulting and related services.





IV.  In
      order
      to ensure that XXNG will perform its obligations under the Consulting Services
      Agreement, and the Pledgee can normally collect the Consulting Services Fees
      from XXNG, the Pledgors agree to pledge all their Equity Interest in XXNG as
      security for the performance of the obligations of XXNG under the Consulting
      Services Agreement and the payment of Consulting Services Fees under such
      agreement.





**NOW
      THEREFORE** ,
      the
      Pledgee, XXNG and the Pledgors through mutual negotiations hereby enter into
      this Agreement based upon the following terms:




1.  Definitions
      and Interpretation .
      Unless
      otherwise provided in this Agreement, the following terms shall have the
      following meanings:





1.1  “ Pledge ”
refers
      to the full content of Section 2 hereunder.





1.2  “ Equity
      Interest ”
refers
      to all the equity interest in XXNG legally held by the Pledgors.





1.3  “ Term
      of Pledge ”
refers
      to the period provided for under Section 3.2 hereunder.





1.4  “ Event
      of Default ”
refers
      to any event in accordance with Section 7.1 hereunder.





1.5  “ Notice
      of Default ”
refers
      to the notice of default issued by the Pledgee in accordance with this
      Agreement.









2.  Pledge .
      The
      Pledgors agree to pledge their Equity Interest in XXNG to the Pledgee
      (“ Pledged
      Collateral ”)
      as a
      security for the obligations of XXNG under the Consulting Services Agreement.
      Pledge under this Agreement refers to the rights owned by the Pledgee, who
      shall
      be entitled to a priority in receiving payment by the evaluation or proceeds
      from the auction or sale of the Equity Interest pledged by the Pledgors to
      the
      Pledgee.





3.  Term
      of Pledge .





3.1  The
      Pledge shall take effect as of the date when the Equity Interest under this
      Agreement is recorded in the Register of Shareholder of XXNG. The term of the
      Pledge shall be for two (2) years after the obligations under the Consulting
      Services Agreement will have been fulfilled. The parties agree that, if
      situations allow, they will use their best efforts to register the Pledge with
      the competent Administration for Industry and Commerce at the registration
      venue
      of XXNG.





3.2  During
      the term of the Pledge, the Pledgee shall be entitled to vote, control, sell,
      or
      dispose of the Pledged Collateral in accordance with this Agreement in the
      event
      that Pledgors do not perform their obligation under the Consulting Services
      Agreement and XXNG fails to pay exclusive technology consulting service fee
      in
      accordance with the Consulting Services Agreement.





4.  Physical
      Possession of Documents .





4.1  During
      the term of Pledge under this Agreement, the Pledgors shall deliver the physical
      possession of their certificates representing shares of capital stock of XXNG
      (“ Share
      Certificates ”)
      to the
      Pledgee within one (1) week as of the date of conclusion of this
      Agreement.





4.2  The
      Pledgee shall be entitled to collect the dividends for the Equity
      Interest.





4.3  The
      Pledge under this Agreement will be recorded in the Register of Shareholders
      of
      XXNG.




5.  Representation
      and Warranties of Pledgors .





5.1  The
      Pledgors own, beneficially and of record, good and marketable title to the
      Equity Interest free and clear of all security interests, liens, adverse claims,
      encumbrances, equities, proxies, options or stockholders’ agreements. Each of
      the Pledgor represents that such Pledgor has no right or claims whatsoever
      to
      any shares of XXNG capital stock other than the Equity Interest, and does not
      have any options, warrants or any other instruments or rights entitling such
      Pledgor to purchase or otherwise acquire shares of XXNG capital
      stock.





5.2  The
      Pledgors have not pledged the Equity Interest to any other party, and the Equity
      Interest is not encumbered to any other person except for the Pledgees.





6.  Covenants
      of Pledgors .





6.1  During
      the effective term of this Agreement, the Pledgors promise to the Pledgee for
      its benefit that the Pledgors shall:





6.1.1  Not
      transfer or assign the Equity Interest, create or permit to create any pledges
      which may have an adverse effect on the rights or benefits of the Pledgee
      without prior written consent from the Pledgee;









6.1.2  Comply
      with and implement laws and regulations with respect to the pledge of rights;
      present to the Pledgee the notices, orders or suggestions with respect to the
      Pledge issued or made by the competent authority within five (5) days upon
      receiving such notices, orders or suggestions; and comply with such notices,
      orders or suggestions; or object to the foregoing matters at the reasonable
      request of the Pledgee or with consent from the Pledgee;




6.1.3  Timely
      notify the Pledgee of any events or any received notices which may affect the
      Pledgor’s Equity Interest or any part of its right, and any events or any
      received notices which may change the Pledgor’s any warranty and obligation
      under this Agreement or affect the Pledgor’s performance of its obligations
      under this Agreement.




6.2  The
      Pledgors agree that the Pledgee’s right to the Pledge obtained from this
      Agreement shall not be suspended or inhibited by any legal procedure launched
      by
      the Pledgor or any successors of the Pledgor or any person authorized by the
      Pledgor or any such other person.




6.3  The
      Pledgors promise to the Pledgee that in order to protect or perfect the security
      for the payment of the Services Fees, the Pledgors shall execute in good faith
      and cause other parties who have interests in the pledge to execute all the
      title certificates, contracts, and perform actions and cause other parties
      who
      have interests to take action, as required by the Pledgee; and make access
      to
      exercise the rights and authorization vested in the Pledgee under this
      Agreement.




6.4  The
      Pledgors promise to the Pledgee that they will execute all amendment documents
      (if applicable and necessary) in connection with any transfer of the Share
      Certificates with the Pledgee or its designated person (natural person or a
      legal entity), and provide the notice, order and decision to the Pledgee by
      who
      considers to be necessary within reasonable time.




6.5  The
      Pledgors promise to the Pledgee that they will comply with and perform all
      the
      guarantees, covenants, warranties, representations and conditions for the
      benefits of the Pledgee. The Pledgors shall compensate all the losses suffered
      by the Pledgee for the reasons that the Pledgors do not perform or fully perform
      their guarantees, covenants, warranties, representations and
      conditions.




7.  Events
      Of Default .





7.1  The
      following events shall be regarded as the events of default:




7.1.1  This
      Agreement is deemed illegal by a governing authority in the PRC, or the Pledgor
      is not capable of continuing to perform the obligations herein due to any reason
      except force majeure;




7.1.2  XXNG
      fails to make full payment of the Services Fees as scheduled under the Service
      Agreement;





7.1.3  A
      Pledgor
      makes any material misleading or mistaken representations or warranties under
      Section 5 herein, and/or the Pledgor breaches any warranties under Section
      5
      herein;




7.1.4  A
      Pledgor
      breaches the covenants under Section 6 herein;




7.1.5  A
      Pledgor
      breaches the term or condition herein;




7.1.6  A
      Pledgor
      waives the pledged Equity Interest or transfers or assigns the pledged Equity
      Interest without prior written consent from the Pledgee;





7.1.7  XXNG
      is
      incapable of repaying the general debt or other debt;




7.1.8  The
      property of the Pledgor is adversely affected causing the Pledgee to believe
      that the capability of the Pledgor to perform the obligations herein is
      adversely affected;





7.1.9  The
      successors or agents of the XXNG are only able to perform a portion of or refuse
      to perform the payment obligations under the Service Agreement;









7.1.10  The
      breach of the other terms by action or inaction under this agreement by the
      Pledgor.




7.2  The
      Pledgor shall immediately give a written notice to the Pledgee if the Pledgor
      is
      aware of or discovers that any event under Section 7.1 herein or any event
      that
      may result in the foregoing events has occurred or is likely to
      occur.




7.3  Unless
      the event of default under Section 7.1 herein has been solved to the Pledgee’s
      satisfaction, the Pledgee, at any time when the event of default occurs or
      thereafter, may give a written notice of default to the Pledgor and require
      the
      Pledgor to immediately make full payment of the outstanding Service Fees under
      the Service Agreement and other payables or exercise other rights in accordance
      with Section 8 herein.





8.  Exercise
      of Remedies .




8.1  Authorized
      Action by Secured Party **.** The
      Pledgors hereby irrevocably appoint Pledgee the attorney-in-fact of the Pledgors
      for the purpose of carrying out the security provisions of this Agreement and
      taking any action and executing any instrument that the Pledgee may deem
      necessary or advisable to accomplish the purposes of this Agreement. If an
      event
      of default occurs, or is continuing, Pledgee shall have the right to exercise
      the following rights and powers:





(a)  Collect
      by legal proceedings or otherwise and endorse, receive and receipt for all
      payments, proceeds and other sums and property now or hereafter payable on
      or on
      account of the Pledged Collateral;





(b)  Enter
      into any extension, reorganization, deposit, merger, consolidation or other
      agreement pertaining to, or deposit, surrender, accept, hold or apply other
      property in exchange for the Pledged Collateral;





(c)  Transfer
      the Pledged Collateral to its own or its nominee’s name;





(d)  Make
      any
      compromise or settlement, and take any action it deems advisable, with respect
      to the Pledged Collateral;





(e)  Notify
      any obligor with respect to any Pledged Collateral to make payment directly
      to
      the Pledgee;





(f)  All
      rights of the Pledgors to exercise the voting and other consensual rights it
      would otherwise be entitled to exercise without any action or the giving of
      any
      notice shall cease, and all such rights shall thereupon become vested in the
      Pledgee;





(g)  All
      rights of the Pledgors to receive distributions with respect to the Pledged
      Collateral which it would otherwise be authorized to receive and retain shall
      cease and all such rights shall thereupon become vested in the Pledgee;
      and




(h)  The
      Pledgors shall execute and deliver to the Pledgee appropriate instruments as
      the
      Pledgee may request in order to permit the Pledgee to exercise the voting and
      other rights which it may be entitled to exercise and to receive all
      distributions which it may be entitled to receive.





The
      Pledgors hereby grant to Pledgee an exclusive, irrevocable power of attorney,
      with full power and authority in the place and stead of the Pledgors to take
      all
      such action permitted under this Section
      8.1 .
      Such
      power of attorney shall be effective, automatically and without the necessity
      of
      any action (including any transfer of any Pledged Collateral) by any person,
      upon the occurrence and continuance of an event of default. Pledgee shall not
      have any duty to exercise any such right or to preserve the same and shall
      not
      be liable for any failure to do so or for any delay in doing so.









8.2  Event
      of default; Remedies .
      Upon
      the occurrence of an event of default, Pledgee may, without notice to or demand
      on the Pledgors and in addition to all rights and remedies available to Pledgee,
      at law, in equity or otherwise, do any of the following:




(a)  Require
      the Pledgors to immediately pay all outstanding unpaid amounts due under the
      Consulting Services Agreement;





(b)  Foreclose
      or otherwise enforce Pledgee’s security interest in any manner permitted by law
      or provided for in this Agreement;





(c)  Sell
      or
      transfer the rights or otherwise dispose of any Pledged Collateral at one or
      more public or private sales at Pledgee’s place of business or any other place
      or places, whether or not such Pledged Collateral is present at the place of
      sale, for cash or credit or future delivery, on such terms and in such manner
      as
      Pledgee may determine;





(d)  Personally,
      or by agents or attorneys, immediately take possession of the Pledged Collateral
      or any part thereof, from the Pledgors or any other person who then has
      possession of any part thereof with or without notice or process of
      law;





(e)  Demand,
      sue for, collect or receive any money or property at any time payable or
      receivable in respect of the Pledged Collateral;





(f)  Sell
      or
      otherwise liquidate, or direct the Pledgors to sell, assign, transfer or
      otherwise liquidate the Pledged Collateral or any part thereof, and take
      possession of the proceeds of any such sale or liquidation;





(g)  Exercise
      any and all rights as beneficial and legal owner of the Pledged Collateral,
      including, without limitation, perfecting assignment of and exercising any
      and
      all voting, consensual and other rights and powers with respect to any Pledged
      Collateral; and





(i)
      All
      the rights and remedies of a secured party upon default under applicable
      law.





8.3  The
      Pledgee shall give a notice of default to the Pledgors when the Pledgee
      exercises its remedies under this Agreement.





8.4  Subject
      to Section 7.3, the Pledgee may exercise its remedies under this Agreement
      at
      any time after the Pledgee gives a notice of default in accordance with Section
      7.3 or thereafter.





8.5  The
      Pledgee is entitled to a priority in receiving payment by the evaluation or
      proceeds from the auction or sale of whole or part of the Equity Interest
      pledged herein in accordance with legal procedure until the unpaid Services
      Fees
      under the Services Agreement are repaid.





8.6  The
      Pledgor shall not hinder the Pledgee from exercising its rights in accordance
      with this Agreement and shall give necessary assistance so that the Pledgee
      may
      exercise its rights in full.





9.  Indemnification .





9.1.  The
      Pledgors hereby indemnifies, saves and holds harmless XXNG, Xilan Equipment,
      Xilan Liquefied Natural Gas Co., Ltd., China Natural Gas, Inc., and each of
      their present and former stockholders, directors, officers, employees, agents,
      affiliates and representatives (each an “Indemnitee”) from and against any and
      all manner of action or actions, cause or causes of action, in law or in equity,
      suits, debts, liens, contracts, agreements, promises, liability, claims,
      demands, damages, loss, cost or expense, of any nature whatsoever, known or
      unknown, fixed or contingent, (hereinafter called “Claims”), arising out of,
      based upon, or relating to the representations and warranties made by the
      Pledgor in Section
      5 above.









9.2  Expenses
      incurred by Indemnitee in connection with any Claims shall be paid by the
      Pledgors in advance upon request of Indemnitee that the Pledgors pay such
      Expenses. Indemnitee hereby undertakes to repay to the Pledgors the amount
      of
      any Expenses theretofore paid by the Pledgors to the extent that it is
      ultimately determined that such Expenses were not reasonable or that Indemnitee
      is not entitled to indemnification. The term “Expenses” shall mean all
      reasonable expenses incurred by the Indemnitee in connection with the Claims
      which shall include, without limitation, damages, judgments, fines, penalties,
      settlements, costs, attorneys’ fees, disbursements and costs of attachment or
      similar bonds, investigations, and any such expenses of establishing a right
      to
      indemnification under this Agreement.





10.  Assignment .





10.1  The
      Pledgors shall not donate or transfer rights and obligations herein without
      prior consent from the Pledgee.





10.2  This
      Agreement shall be binding upon each of the Pledgors and his, her or its
      successors and be binding on the Pledgee and his each successor and
      assignee.





10.3  The
      Pledgee may transfer or assign his all or any rights and obligations under
      the
      Service Agreement to any individual specified by it (natural person or legal
      entity) at any time. In this case, the assignee shall enjoy and undertake the
      same rights and obligations herein of the Pledgee as if the assignee is a party
      hereto. When the Pledgee transfers or assigns the rights and obligations under
      the Service Agreement, and such transfer shall only be subject to a written
      notice serviced to Pledgors, and at the request of the Pledgee, the Pledgors
      shall execute the relevant agreements and/or documents with respect to such
      transfer or assignment.





10.4  After
      the
      Pledgee’s change resulting from the transfer or assignment, the new parties to
      the Pledge shall execute a new pledge contract.





11.  Effectiveness
      and Term .
      The
      agreement is effective as of the date first set forth above and from the date
      when the Pledge is recorded on the Register of Shareholders of XXNG.





12.  Formalities,
      Fees and Other Charges .





12.1  The
      Pledgors shall be responsible for all the fees and actual expenses in relation
      to this Agreement including but not limited to legal fees, cost of production,
      stamp tax and any other taxes and charges. If the Pledgee pays the relevant
      taxes in accordance with the laws, the Pledgors shall fully indemnify the
      Pledgee such taxes paid by the Pledgee.




12.2  The
      Pledgors shall be responsible for all the fees (including but not limited to
      any
      taxes, formalities fees, management fees, litigation fees, attorney’s fees, and
      various insurance premiums in connection with disposition of Pledge) incurred
      by
      the Pledgors for the reason that the Pledgors fail to pay any payable taxes,
      fees or charges for other reasons which cause the Pledgee to recourse by any
      means or ways.




13.  Force
      Majeure .





13.1  “ Force
      Majeure ,”
shall
      include but not be limited to acts of governments, acts of nature, fire,
      explosion, typhoon, flood, earthquake, tide, lightning, war, refers to any
      unforeseen events beyond the party’s reasonable control and cannot be prevented
      with reasonable care. However, any shortage of credit, capital or finance shall
      not be regarded as an event beyond a Party’s reasonable control. The affected
      party by Force Majeure shall notify the other party of such event resulting
      in
      exemption promptly.









13.2  In
      the
      event that the affected party is delayed in or prevented from performing its
      obligations under this Agreement by Force Majeure, only within the scope of
      such
      delay or prevention, the affected party will not be responsible for any damage
      by reason of such a failure or delay of performance. The affected party shall
      take appropriate means to minimize or remove the effects of Force Majeure and
      attempt to resume performance of the obligations delayed or prevented by the
      event of Force Majeure. After occurrence of an event of Force Majeure, when
      such
      event or condition ceases to exist, both parties agree to resume the performance
      of this Agreement with their best efforts.




14.  Confidentiality .
      The
      parties of this agreement acknowledge and make sure that all the oral and
      written materials exchanged relating to this contract are confidential. All
      the
      parties have to keep them confidential and can not disclose them to any other
      third party without other parties’ prior written approval, unless: (a) the
      public know and will know the materials (not because of the disclosure by any
      contractual party); (b) the disclosed materials are required by laws or stock
      exchange rules; or (c) materials relating to this transaction are disclosed
      to
      parties’ legal consultants or financial advisors, however, who have to keep them
      confidential as well. Disclosure of confidential information by employees or
      hired institutions of the parties is deemed as the act by the parties,
      therefore, subjecting them to liability.





15.  Dispute
      Resolution .





15.2  This
      Agreement shall be governed by and construed in accordance with the PRC
      law.




15.3  The
      parties shall strive to settle any dispute arising from the interpretation
      or
      performance, or in connection with this Agreement through friendly consultation.
      In case no settlement can be reached through consultation, each party can submit
      such matter to China International Economic and Trade Arbitration Commission
      (“ CIETAC ”)
      for
      arbitration. The arbitration shall follow the current rules of CIETAC, and
      the
      arbitration proceedings shall be conducted in Chinese and shall take place
      in
      Beijing. Any resulting arbitration award shall be final and binding upon the
      parties.




16.  Notices .
      Any
      notice which is given by the parties hereto for the purpose of performing the
      rights and obligations hereunder shall be in writing. Where such notice is
      delivered personally, the time of notice is the time when such notice actually
      reaches the addressee; where such notice is transmitted by facsimile, the notice
      time is the time when such notice is transmitted. If such notice does not reach
      the addressee on business date or reaches the addressee after the business
      time,
      the next business day following such day is the date of notice. The delivery
      place is the address first written above of the parties hereto or the address
      advised in writing including via facsimile from time to time.





17.  Entire
      Contract .
      All
      Parties agree that this Agreement constitute the entire agreement of the Parties
      with respect to the subject matter therein upon its effectiveness and supersedes
      and replaces all prior oral and/or written agreements and understandings
      relating to this Agreement.





18.  Severability .
      Any
      provision of this Agreement which is invalid or unenforceable because of
      inconsistent with the relevant laws shall, as to that jurisdiction, be
      ineffective to the extent of such invalidity or unenforceability, without
      affecting in any way the remaining provisions hereof.





19.  Appendices .
      The
      appendices to this Agreement are entire and integral part of this
      Agreement.




20.  Amendment
      or Supplement .




20.1  Parties
      may amend and supply this Agreement with a written agreement, provided that
      such
      amendment shall be duly executed and signed by the Pledgee, XXNG, and holders
      of
      a majority of the shares of XXNG held by the Pledgors, and such amendment shall
      thereupon become a part of this Agreement and shall have the same legal effect
      as this Agreement.









20.2  This
      agreement and any amendments, modification, supplements, additions or changes
      hereto shall be in writing and come into effect upon being executed and sealed
      by the parties hereto.




21.  Copies
      of the Agreement .
      This
      Agreement is executed by the Parties in counterparts, each Party holds one
      counterpart, and each original has the same legal effect.





22.  Language
      and Counterparts .
      This
      Agreement is written in both Chinese and English language in two copies, each
      party having one copy with equal legal validity, in case there is any conflict
      between the Chinese version and the English version, the English version shall
      prevail.





[SIGNATURE
      PAGE FOLLOWS]







**IN
      WITNESS WHEREOF** each
      party hereto has caused this Agreement duly executed by itself or a duly
      authorized representative on its behalf as of the date first written
      above.




**PLEDGEE:**Shaanxi
                Xilan Natural Gas Equipment Co.,Ltd.By:/s/
                Qinan JiQinan
              Ji, ChairmanXi'an
                Xilan Natural Gas Co.,LtdBy:/s/
                Qinan JiQinan
                  Ji, Chairman




**PLEDGORS:**


By: 
                  /s/ Qinan JiName: 
                  QINAN JI
  By: 
                    /s/ Mingshan HanName: 
                    MINGSHAN HAN
 By: 
                            /s/ Xiaoli JiaName: 
                            XIAOLI JIA
 By: 
                          /s/ Yuai SheName: 
                          YUAI SHE
 By: 
                                /s/ Xiang JiName: 
                                XIANG JI
 By: 
                                    /s/ Jiaoyin ShiName: 
                                    JIAOYIN SHI
 By: 
                        /s/ Shaohu JiaName: 
                        SHAOHU JIA
 By: 
                          /s/  Xingiao HanName: 
                          XINGIAO HAN
 By: 
                            /s/ Shengming LiName: 
                            SHENGMING LI
 By: 
                            /s/ Mingshan HanName: 
                            MINGSHAN HAN
 By: 
                      /s/ Liyin ShiName: 
                      LIYIN SHI