[Stamp
        Tax]


       

      URBAN
        GAS DEVELOPMENT AGREEMENT

       

      Party
        A: Construction Bureau of Jinzhou Town

      


      Party
        B: Beijing Zhong Ran Wei Ye Gas Co., Ltd.

      


      Date: November
        20, 2003

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      URBAN
        GAS
        DEVELOPMENT AGREEMENT

      


      Contract
        SN: 

      Signatory
        Location: Construction
        Bureau of Jinzhou Town

      


      Party
        A: Construction
        Bureau of Jinzhou Town

      Party
        B: Beijing
        Zhong Ran Wei Ye Gas Co., Ltd.


      


      Chapter
        I General
        Principles

      


      
        	
                1.1

              	
                WHEREAS,
                  (i) the Government of Jinzhou Town agrees to authorize Party B
                  the
                  exclusive right to develop, construct and operate the pipeline
                  gas project
                  in the urban area of Jinzhou County (the “Pipeline
                  Project”),
                  (ii) based on the Contact
                  Law of the People’s Republic of China and
                  other relevant applicable laws and regulations, and (ii) after
                  field study
                  and friendly consultations, the Parties hereby agree as follows
                  in
                  relation to the construction of the Pipeline Project in Jinzhou
                  County
                  (the “Agreement”).

              


      

      


      Chapter
        II Parties

      


      
        	
                2.1

              	
                Construction
                  Bureau of Jinzhou Town (hereinafter referred to as “Party
                  A”)

              


      

      Legal
        address:  Shifu
        Street

      Tel.:  (0311)
        4322293

      


      
        	2.2	
                Beijing
                  Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter referred to as “Party
                  B”)

                Legal
                  address: Caizhiguoji Building No.
                  18 Zhongguancundong Street, Haidian
                  District

                Tel.:
                  (010) 82600041

              


      

      
      

      Chapter
        III Establishment
        of the Company

      


      
        	
                3.1

              	
                Party
                  A, authorized by and on behalf of the Government of Jinzhou Town,
                  agrees
                  that Party B will be responsible for the urban Pipeline Project
                  of Jinzhou
                  Town and the total financing of the Pipeline
                  Project.

              


      

      


      
        	3.2	
                Name
                  of the Company: Jinzhou
                  Town Wei Ye Gas Co., Ltd.

              


      

      


      
        	
                3.3

              	
                The
                  Company as a legal person under the PRC law: is subject to the
                  jurisdiction and protection of the PRC laws, regulations and relevant
                  rules (hereinafter referred to as “PRC
                  laws”),
                  and is authorized to conduct its business activities in compliance
                  with
                  the PRC laws.

              


      

      


      Chapter
        IV Business
        Scope

      


      
        	4.1	
                Business
                  Scope of the Company: within
                  the urban planned area of Jinzhou Town, to: design, construct,
                  manage,
                  develop and operate the pipeline network of natural gas and its
                  auxiliary
                  facilities, and provide relevant maintenance and emergency repair
                  services; construct and operate natural gas stations; supply natural
                  gas
                  and provide after-sale services to industrial transmission, commercial
                  construction, civic utility and public transportation; exploit
                  natural gas
                  reserves, design for the transportation and transmission thereof,
                  construct and management the operation related thereto. The company
                  invests 60 million Yuan for the Pipeline
                  Project.

              


      

       

      
        
          
          

        

        
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      Chapter
        V Exclusive
        Operating Right

      


      
        	
                5.1

              	
                Party
                  A authorizes Party B to execute the pipe natural gas project within
                  Jinzhou Town and guaranties that Party B has the exclusive right
                  to
                  develop and construct the pipe gas project within Jinzhou Town
                  for 30
                  years.

              


      

      


      
        	
                5.2

              	
                Party
                  A will consider extending the 30 year exclusive operation term;
                  provided,
                  that Party B can ensure the normal supply of gas during such
                  period.

              


      

      


      
        	
                5.3

              	
                If
                  Party A breaches this Agreement during the term of this Agreement
                  (which
                  causes Party B to lose the exclusive operating right granted hereunder),
                  Party A shall compensate Party B for its projected economic benefits
                  for
                  the term of this Agreement.

              


      

      


      Chapter
        VI Rights
        & Obligations of the Parties

      


      
        	
                6.1

              	
                Party
                  A shall be responsible for the coordination with the local government
                  and
                  relevant departments of the government and shall provide the following
                  warranties to Party B in the form of official government
                  documents:

              


      

      


      
        	
              	6.1.1	
                to
                  grant Party B the exclusive right to construct and operate pipe
                  natural
                  gas project within the urban planned area of Jinzhou Town for 30
                  years and
                  ensure the legality thereof; not to approve any new pipe gas project
                  during such time; not to approve the construction of a new gas
                  station or
                  extending a gas station; to guarantee that the pipeline network
                  constructed by Party B in Jinzhou Town pursuant to this Agreement
                  accept
                  natural gas when the long natural gas pipeline reaches Jinzhou
                  Town, and
                  the continual operation of the pipeline
                  network;

              


      

      


      
        	
              	6.1.2	
                Installation
                  fee, material fees and gas price.

                a.
                  For residential customers, the installation fee plus material fees
                  (including IC gas appliance and soft pipe but not natural gas stove)
                  for a
                  household shall be RMB 2,200/unit.
                  (Interim)

              


      

       

      b.
        For
        other customers (including plants, restaurants, hotels, governments, armies,
        hospitals, schools etc), the installation fee plus material fees shall be
        RMB
        500/day. The practical situation shall be determined by the exact gas
        consumption and referred to the gas supply contract. 


      
        
          
          

        

        
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      c.
        The
        gas price shall be RMB 2.6 per cubic meter. (Interim) 

      


      d.
        If
        there is any adjustment to the national and local charging standards or if
        the
        market economy develops, the gas price and pipeline transmission tariffs
        may be
        adjusted accordingly after having been approved by the government department
        in
        charge of gas pricing.

      


      e.
        The
        upper limit of the gas price range is set according to the price approved
        by the
        government departments in charge of gas pricing. The lower limit is set
        according to the market affordability.

      


      
        	 	
                6.1.3

              	
                to
                  ensure that Party B shall enjoy the relevant government preferential
                  policies relating to business investment and raising of capital,
                  urban
                  infrastructure construction and land grant in Jinzhou Town. Party
                  B shall
                  enjoy preferential charge of Construction Bureau administration
                  fee.

              


      

      


      
        	
                6.2

              	
                Party
                  A shall be responsible for assisting Party B in the following
                  matters:

              


      

      


      
        	
              	6.2.1	
                the
                  application and registration procedures to establish the gas project
                  company;

              


      

      


      
        	 	
                6.2.2

              	
                the
                  procedures for land use, planning, fire protection and commencement
                  of
                  project construction;

              


      

      


      
        	 	
                6.2.3

              	
                making
                  available water, electricity and transportation and handle other
                  infrastructure related matters and assisting Party B to organize
                  the
                  design and construction of the
                  project;

              


      

      


      
        	 	
                6.2.4

              	
                application
                  of all potentially available tax and administrative fee waivers
                  and
                  deductions;

              


      

      


      
        	 	
                6.2.5

              	
                timely
                  provision of the municipal planning and relevant materials to Party
                  B upon
                  its request;

              


      

      


      
        	 	
                6.2.6

              	
                requiring
                  the inclusion of construction of pipe gas project as part of any
                  new real
                  estate development project and any renovation or expansion projects
                  related thereto in order to obtain the required government approval;
                  The
                  government departments that are in charge of urban construction,
                  planning,
                  public utilities, real estate must supervise closely to ensure
                  that pipe
                  gas projects are designed, constructed and inspected simultaneously
                  and
                  together with the principal projects, and can only be constructed
                  by Party
                  B, otherwise, such projects shall not be approved for construction,
                  inspection and no sales permit shall be issued
                  therefor.

              


      

      


      
        	
                6.3

              	
                Party
                  B’s Responsibilities 

              


      

       

      
        	
              	6.3.1	
                raising
                  funds for the Pipeline Project;

              


      

       

      
        
          
          

        

        
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              	6.3.2	
                construction
                  of the Pipeline Project; construction of the pipeline network according
                  to
                  the municipal planning of Jinzhou Town; construction of the main
                  pipeline
                  network to the east of the Xiangyang Street within one year following
                  the
                  signing of this Agreement and construction of the main pipeline
                  network to
                  the west of the Xiangyang Street within two years following the
                  signing of
                  this Agreement;

              


      

      


      
        	 	
                6.3.3

              	
                project
                  design and construction, and operation management upon completion
                  of the
                  Pipeline Project; construction of the gas supply pipes in accordance
                  with
                  the urban planning of Jinzhou Town and users’
                  requests;

              


      

      


      
        	 	
                6.3.4

              	
                ensuring
                  the continuous and safe gas supply except in the case of force
                  majeure;

              


      

      


      
        	 	
                6.3.5

              	
                periodic
                  inspection, repair and maintenance of gas stations and pipelines
                  inside
                  and outside residential buildings according to the PRC rules to
                  ensure
                  year-round safe operation; 

              


      

      


      
        	 	
                6.3.6

              	
                guaranteeing
                  that the quality of gas supplied hereunder complies with the relevant
                  PRC
                  rules;

              


      

      


      
        	 	
                6.3.7

              	
                organizing
                  project inspection by the relevant parties upon completion of the
                  Pipeline
                  Project.

              


      

      


      Chapter
        VII Miscellaneous
        Provisions

      


      
        	7.1	
                If
                  Party B causes the Pipeline Project to stop for a long time, Party
                  A has
                  the right to cancel party B’s exclusive operating right and exclusive
                  construction right. 

              


      

      


      
        	7.2	
                Should
                  any Party fail to perform any of its obligations under this agreement
                  or
                  materially breach the provisions of this agreement, which causes
                  the
                  project company to discontinue its operation or be unable to meet
                  the
                  operational purposes of the Pipeline Project as provided under
                  this
                  agreement, the breaching Party shall be deemed to have unilaterally
                  terminated the agreement, and the non-breaching Party shall have,
                  in
                  addition to any right to and claim for damages, the right to apply
                  to the
                  original approving government authority for the termination of
                  this
                  Agreement in accordance with this
                  Agreement.

              


      

      


      
        	7.3	
                Should
                  any Party be prevented from performing its obligations under this
                  agreement due to the occurrence of any event of Force Majeure such
                  as
                  earthquake, windstorm, flood, fire, war and any other unforeseeable
                  event
                  whose occurrence and consequences are beyond control, such Party
                  shall
                  immediately notify the other Party, and within 15 days [following
                  the
                  occurrence of such event], provide documents stating the details
                  of such
                  event, the reasons for complete or partial nonperformance by such
                  Party
                  and documents evidencing the occurrence of such events. Such documents
                  shall be issued by a notary public institution located at the place
                  where
                  such event occurs. The Parties shall negotiate based on the extent
                  to
                  which the performance of this Agreement has been
                  affected.

              


      

       

      
        
          
          

        

        
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        	7.4	
                There
                  are four originals of this agreement. Each party holds two
                  originals.

              


      

      


      
        	7.5	
                This
                  Agreement shall not be binding upon any Party unless signed by
                  the
                  Parties.

              


      

       

      
        	Party A (Seal): 
                _Sealed
                	Party
                B (Seal): Sealed
                
	 	 
	Representative (Signature): Signed 	Representative (Signature): Signed
	 	 
	Date: November
                20, 2003	Date: November
                20, 2003


      

       

      
        
          
          

        

        
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      Appendix

      


      Party
        A: Construction
        Bureau of Jinzhou Town

      Party
        B: Beijing
        Zhong Ran Wei Ye Gas Co., Ltd.


      


      To
        develop the urban construction of Jinzhou Town, Party B agrees to charge
        every
        new household 200 RMB for the exclusive right fee paid to Party A. After
        this
        Agreement is signed by both parties and binding, Party A shall assist Party
        B to
        register a subsidiary company. The subsidiary company shall pay Party A RMB
        250
        thousand as prepayment of exclusive right fee after it is
        incorporated.

       

      
        	Party A (Seal):Sealed
                	Party B (Seal): Sealed
	 	 
	Representative (Signature): Signed 	Representative (Signature): Signed
	 	 
	Date: November
                20, 2003	Date: November
                20, 2003


      

       

      
        
          
          

        

        
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