[Stamp
      Tax]

    


    URBAN
      GAS DEVELOPMENT AGREEMENT

    


    Party
      A: Construction
      Bureau of Changli Country

    


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

    


    Date: July
      02, 2004

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    URBAN
      GAS
      DEVELOPMENT AGREEMENT

    


    Contract
      SN: 

    Signatory
      Location: Construction
      Bureau of Changli Country

    


    Party
      A: Construction
      Bureau of Changli Country

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


    


    
      Chapter
        I
        General Principles

    

     

    
      	
              1.1

            	
              WHEREAS,
                (i) the Government of Changli Country agrees to authorize Party B
                the
                exclusive right to develop, construct and operate the pipeline gas
                project
                in the urban area of Changli Country (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 Changli Country
                (the “Agreement”).

            


    

     

    
      Chapter
        II Parties



    
      	
              2.1

            	
              Construction
                Bureau of Changli Country (hereinafter referred to as “Party
                A”)

            


    

    Legal
      address:  

    Tel.:  

    


    
      	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 Changli Country,
                agrees that Party B will be responsible for the Pipeline Project
                of
                Changli Country and the total financing of the Pipeline
                Project.

            


    

    


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

            


    

     

    
      Chapter
        IV Business Scope

      
 

    

    
      	4.1	
              Business
                Scope of the Company: within the urban planned area of Changli Country,
                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. 

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      Chapter
        V
        Exclusive Operating Right

      
 

    

    
      	
              5.1

            	
              Party
                A authorizes Party B to execute the pipe natural gas project within
                Changli Country and guaranties that Party B has the exclusive right
                to
                develop and construct the pipe gas project within Changli Country
                for 30
                years; provided, that Party B strictly execute 6.4.2 in this
                Agreement.

            


    

    


    
      	
              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,
                Party A
                shall bear the losses resulting from such breach. If Party A or any
                of its
                agents or entrusted parties breach 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. If Party B breaches
                this
                Agreement or fails to accurately forecast the natural gas market,
                or it
                fails to conduct normal operation, which causes suspension of operation
                or
                bankruptcy, Party B shall compensate the customers for the initial
                installation fees incurred by them, and Party A shall have the right
                to
                terminate this Agreement and engage new natural gas
                suppliers.

            


    

     

    
      Chapter
        VI Rights & Obligations of the Parties



    
      	
              6.1

            	
              The
                Parties shall construct the Pipeline Project based to the high standards
                and principles. The Pipeline Project is designed for supplying gas
                to an
                aggregate of 50,000 units. The first stage of the Pipeline Project
                is to
                supply for 3000 units (the “First Stage”). Party B agrees that it shall
                complete the First Stage and start gas supply to the first customers
                within 6 months, provided, that the actual number of the households
                is not
                lower than 1000. Party B agrees that it shall construct and improve
                the
                pipeline network in stages according to users’ requests after the First
                Stage completes.

            


    

    


    
      	
              6.2

            	
              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:

            


    

    


    
      	
            	6.2.1	
              to
                grant Party B the exclusive right to construct and operate pipe natural
                gas project within the urban planned area of Changli Country for
                30 years
                and ensure the legality thereof; not to approve any new pipe gas
                project
                during such time; to guarantee that the pipeline network constructed
                by
                Party B in Changli Country pursuant to this Agreement accept natural
                gas
                when the long natural gas pipeline reaches Changli Country, and the
                continual operation of the pipeline network; not to authorize any
                other
                company to operate;

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    
      	
            	6.2.2	
              to
                guarantee that the initial residential installation fee shall be
                no higher
                than RMB 2,000/unit for a household and the residential gas price shall be
                no higher than RMB 2.3 per cubic meter. The final gas price shall
                be
                approved by the government departments in charge of
                pricing.

            


    

    


    
      	 	
              6.2.3

            	
              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 Changli County. Considering
                that the Pipeline Project is an urban infrastructure project, any
                government fees to be incurred by Party B for the destruction of
                municipal
                roads for the construction of the condensed gas station and pipeline
                network shall be deducted or
                exempted;

            


    

    


    
      	 	
              6.2.4

            	
              to
                require 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.

            


    

    


    
      
        
          	6.3	
                  Party
                    A shall be responsible for assisting Party B in the following
                    matters:

                


        

      

    

    


    
      	 	
              6.3.1

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

            


    

    


    
      	 	
              6.3.2

            	
              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;

            


    

    


    
      	 	
              6.3.3

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

            


    

    


    
      	 	
              6.3.4

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

            


    

    


    
      	 	
              6.3.5

            	
              implementation
                of warranties in appendices to this
                Agreement.

            


    

    


    
      
        
          	6.4	
                  Party
                    B’s Responsibilities 

                


        

      

    

     

    
      	
            	6.4.1	
              raising
                funds for the Pipeline Project;

            


    

    


    
      	
            	6.4.2	
              contriving
                the scheme of the Pipeline Project in accordance with the general
                urban
                planning of Changli Country; implementing in stages, operating and
                managing upon completion thereof after having been approved by the
                Department of Development Planning;

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	 	
              6.4.3

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

            


    

    


    
      	 	
              6.4.4

            	
              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;

            


    

    


    
      	 	
              6.4.5

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

            


    

    


    
      	 	
              6.4.6

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

            


    

    


    
      	 	
              6.4.7

            	
              signing
                specific gas supply contracts with the
                customers.

            


    

     

    
      Chapter
        VII Miscellaneous Provisions



    
      	7.1	
              Any
                modification to this agreement and its supplemental agreement(s)
                shall not
                be valid and effective unless such modification is in writing and
                signed
                by both parties to this Agreement.

            


    

    


    
      	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 whether to cancel
                the
                entire Agreement or to discharge certain obligations of the non-performing
                party under this agreement based on the extent to which the performance
                of
                this Agreement has been affected.

            


    

    


    
      	7.4	
              Any
                and all disputes arising out of or relating to the performance of
                this
                Agreement shall be settled by the Parties through friendly consultations.
                If the disputes are not resolved through friendly consultations,
                then each
                party agrees to be subject to the jurisdiction of the People’s Court of
                the locality where this Agreement is
                executed.

            


    

    


    
      	7.5	
              In
                the course of judicial procedures, the Parties shall continue to
                perform
                their respective obligations under this Agreement, with the exception
                of
                those parts of this Agreement which are under
                dispute.

            


    

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    
      	7.6	
              The
                Parties may negotiate and execute documents to supplement this Agreement.
                Such supplemental agreements shall have the same force and effect
                as this
                Agreement. 

            


    

    


    
      	7.7	
              This
                Agreement and any of its supplemental agreements shall not be binding
                upon
                any Party unless signed and sealed by the
                Parties.

            


    

    


    
      	7.8	
              There
                are four originals of this agreement. Each party holds two
                originals.

            


    

    

      
        	
                Party
                  A (Seal): Sealed

              	
                Party
                  B (Seal): Sealed

              
	 	 
	
                Representative
                  (Signature): Signed

              	
                Representative
                  (Signature): Signed

              
	 	 
	
                Date:
                  July 2, 2004 

              	
                Date:
                  July 2, 2004

              


      

    

     

    
      
        
        

      

      
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