**Equity      Transfer Agreement **

**of      **

**Qingdao      Sinogas Yuhan Chemical Equipment Co., Ltd.**

| Assignor: | Qingdao                Kangtai Machinery Equipment Manufacture Co., Ltd. (hereinafter referred                to                as Party A) |
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| Assignor: | Shi                Guili (hereinafter referred to as Party B) |
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| Assignee: | Qingdao                Sinogas General Machinery Limited Corporation (hereinafter referred                to as                Party C) |
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| Assignee: | Sinoenergy                Holding Limited (hereinafter referred to as Party                D) |
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| 1. | Qingdao                Sinogas Yuhan Chemical Equipment Co., Ltd. (hereinafter referred                to as                Yuhan) is a domestic-funded                company founded by party A, party B and Party C. Party A holds 20%                of the                share of Yuhan, Party B holds 25% of the share Yuhan, and Party C                holds                55% of the share Yuhan. |
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| 2. | Party                A and Party B intend to transfer the share they hold to Party C and                Party                D. And Party C and Party D intend to accept the share of Yuhan held                by                Party A and Party B. |
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| 1. | Party                A agrees to transfer the 20% share of Yuhan                in according to the provisions of the agreement to Party C. Party                C agrees                to accept the share in according to the provisions of the agreement.                The                share transferring payment is $1,125,000 US dollars (9 million RMB).                Party                B                agrees to transfer the 25% share of Yuhan                in according to the provisions of the agreement to Party D. Party                D agrees                to accept the share in according to the provisions of the agreement.                The                share transferring payment is $375,000 US dollars (3 million RMB).                Party                A, Party B and Party C confirm to give up the right of pre-emption. |
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| 2. | Share                transfer is conducted by phases: |
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| 1) | The                first phase: |
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| 2) | Party                C pays the share transferring fee of $500,000 US dollars (4 million                RMB)                to Party A by the end of September, 2006. Party A transfers 10% of                the                share of Yuhan to Party C as consideration. After Party C pays all                of the                transferring fees, the four parties (Party A, Party B, Party C and                Party                D) will go through the relative examination, approval and registration                procedure regarding share                transferring. |
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| 3) | Party                C pays the share transferring fee of $625,000 US dollars (5 million                RMB)                to Party A by the end of September, 2008. Party A transfers the remaining                10% of the share of Yuhan to Party C as consideration. After Party                C pays                all of the transferring fees, the four parties (Party A, Party B,                Party C                and Party D) will go through the relative examination, approval and                registration procedure regarding share                transferring. |
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| 4) | Considering                that the transferring is conducted in phases, each party agrees to                sign                share transferring agreement in each stage to reflect new share structure,                in order to go through the relative examination, government approval                and                registration procedure regarding share transferring. The share                transferring agreements in each phase are components of this                agreement. |
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| 5) | As                regarding to the undistributed                profit of Yuhan between the July, 2005 to May 31th, 2006, and the                current                funds Party A has invested in Yuhan, after deducting the historical                arrear, the remaining part will be paid to Party A by the end of                December,2006 in two times, each                50%. |
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| 6) | Party                A and Party B promised that after finishing the share transferring                of                first phase, Party A and Party B and their relative shareholders                promise                that the business orders they receive will not conflict with Party                C. If                the orders receive by Party A conflict with that of Party C, Party                A                agrees that the contract be signed by Party C and be manufactured                by Party                A, and after calculating the costs, Party C will pay all the profits                to                Party A in the form of rent fees. |
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| 7) | Party                A promises that all the managing, operating and technical staff of                Yuhan                (not including quitting job due to personal reasons, but party A                should                not recruit the corresponding new employees )except Shi Guiqiang,                Li                Zuoxian should stay in their posts, to ensure the normal operation                and                continual normal management. |
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| 8) | Party                A, party c, Party D agrees to employ Shi Guili as the president of                Yuhan                for two years from the day when the fist transferring phase ended,                with a                salary of not less $62,500 US dollars (500,000 RMB) per year (at                the same                time, party A will not insist on the dividends from the day the agreement                is signed to the end of the third share transferring                period). |
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| 9) | As                to the obligatory right and debts now existing in Yuhan, part A,                and Party                B should clear them actively. As to the part that involving both                Part A                and Part C, both parties should commit their best efforts and should                the                responsibility to keep the interest of the                company. |
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| 10) | Party                A promises that he will not use any capital of company to pay the                cost for                share transferring of each phases in order to ensure the healthy                operation                and continual development of the                company. |
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| 11) | Disputes                arising in reading to implementing the agreement and the share                transferring agreements of various phases should be solved by negotiation.                If the negotiation fails, any party can put it to the local                court. |
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| 12) | Unaccomplished                matter                regarding this agreement, parties will negotiate at each stage and                sign                supplementary agreements to predetermine                them. |
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| 13) | The                agreement will come                into effect from the day it is signed, in quadruplicate, and each                party                holds one of them. |
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