[Stamp
      Tax]

    


    URBAN
      GAS DEVELOPMENT AGREEMENT

    (For
      Wholly Owned Gas Company)

    


    Party
      A: Construction
      Bureau of Yutian County

    


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

    


    Date: November
      7, 2003

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    URBAN
      GAS
      DEVELOPMENT AGREEMENT

    


    Contract
      SN: YTWY-001

    Signatory
      Location: Construction
      Burea of Yutian

    


    


    Party
      A: Construction
      Bureau of Yutian County

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


    


    Chapter
      I
General
      Principles

    


    
      	1.1  	
              WHEREAS,
                (i) the Government of Yutian County agrees to authorize Party B the
                exclusive right to develop, construct and operate the pipeline gas
                project
                in the urban area of Yutian County (the “Pipeline
                Project”),
                (ii) based on the Contact
                Law of the People’s Republic of China,
                the
                Cooperative Joint Venture 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 Yutian County
                (the
                “Agreement”).

            


    

    


    Chapter
      II Parties

    


    
      	2.1  	
              Construction
                Bureau of Yutian County (hereinafter referred to as “Party
                A”)

            


    

    Legal
      representative: Yang
      Huifang

    Legal
      address:  No.
      659
      Fanrong Road, Yutian County, Hebei Province

    Tel.:  (0315)
      6163761

    


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

            


    

    Legal
      representative: Liu
      Yuchuan

    Legal
      address:  No.
      8
      Huibin Mansion, Beicheng Road East, Chaoyang District, Beijing 

    Tel.:  (010)
      84992156

    


    Chapter
      III Establishment
      of the Company

    


    
      	3.1  	
              Party
                A, authorized by and on behalf of the Government of Yutian County,
                agrees
                that Party B will be responsible for the urban Pipeline Project of
                Yutian
                Country and the total financing of the Pipeline
                Project.

            


    

    


    
      	3.2  	
              Name
                of the Company: Yutian
                Zhong Ran Wei Ye Gas Co., Ltd.
                (Interim)

            


    

    


    
      	3.3  	
              The
                Company as a legal person und 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.

            


    

    


    
      
        
        

      

      
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    Chapter
      IV Business
      Scope

    


    
      	    
              4.1	
              Business
                Scope of the Company: within
                the urban planned area of Yutian County, 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.

            


    

    


    Chapter
      V Exclusive
      Operating Right

    


    
      	5.1  	
              Party
                A authorizes Party B to execute the pipe natural gas project within
                the
                urban planned area of Yutian County and guaranties that Party B has
                the
                exclusive right to develop and construct the pipe gas project within
                the
                urban planned area of Yutian County for 50
                years.

            


    

    


    
      	5.2  	
              Party
                A will consider extending the 50 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 supply gas to
                an
                aggregate of 20,000 units with the total investment of approximately
                RMB
                86 million. The first stage of the Pipeline Project is to supply
                for 1,500
                units for the Changsheng Community (the “First Stage”). Party B agrees
                that it shall complete the First Stage and start gas supply to the
                first
                customers within 6 months. 

            


    

    


    
      	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 natural
                gas
                project within the urban planned area of Yutian County for 50 years
                and
                ensure the legality thereof; not to approve any new pipe gas project
                during such time;

            


    

     

    
      
        
        

      

      
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      	6.2.2  	
              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 Yutian 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 by 50%.

            


    

    


    
      	
            	     
              6.2.3	
              to
                require the inclusion of construction of pipeline 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 pipeline 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
                  A shall be responsible for assisting Party B in the following
                  matters:

              


      

    

    


    
      	6.3.1  	
                 
                the application and registration procedures to establish the gas
                project
                company;

            


    

    


    
      	6.3.2  	
                  the
                procedures for land use, planning, fire protection and commencement
                of
                project construction;

            


    

    


    
      	
            	 
              6.3.3	
              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;

            


    

    


    
      	6.3.4  	
              application
                of all potentially available tax and administrative fee waivers and
                deductions;

            


    

    


    
      	6.3.5  	
              timely
                provision of the municipal planning and relevant materials to Party
                B upon
                its request;

            


    

    


    
      	6.3.6  	
              uniform
                planning, implementation and management of pipeline gas project in
                accordance with the urban planning of Yutian Country; complete and
                improve
                the pipe gas network in stages in accordance with users’
                requests.

            


    

    


    
      	    
              6.4	
              Party
                B’s Responsibilities

            


    

     

    
      	
            	 
              6.4.1	
              raising
                funds for the Pipeline Project;

            


    

    


    
      	6.4.2  	
                 
                project design and construction, and operation management upon completion
                of the Pipeline Project;

            


    

     

    
      
        
        

      

      
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              6.4.3	
              repair
                of broken facilities during
                construction;

            


    

    


    
      	
            	 
              6.4.5	
              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;

            


    

    


    
      	
            	 
              6.4.6	
              guaranteeing
                that the quality of gas supplied hereunder complies with the relevant
                PRC
                rules;

            


    

    


    
      	
            	 
              6.4.7	
              organizing
                project inspection by the relevant parties upon completion of the
                Pipeline
                Project;

            


    

    


    
      	
            	 
              6.4.8	
              [guaranteeing
                that the pipeline networks constructed by Party B in Yutian County
                pursuant to this Agreement accept natural gas when the long natural
                gas
                pipeline reaches Yutian County, and the continual operation of the
                pipeline network];1 
                The meaning of the original Chinese text for this provision is clear.
                

            


    

    


    
      	
            	 
              6.4.9	
              guaranteeing
                that the initial residential installation fee shall be no higher
                than RMB
                2,000/unit and the residential sale price shall be no higher than
                RMB 2.1
                per cubic meter within the first 2 years. Thereafter, if there is
                any
                adjustment to the national industrial standard and gas price, the
                initial
                installation fee and gas sale price may be adjusted accordingly after
                approval by the county government, and periodical hearings on gas
                prices
                will be held among residential owners and the government departments
                in
                charge of gas pricing.

            


    

    


    
      	
            	     
              6.4.10	
              guaranteeing
                that the Pipeline Project will be duly executed and completed in
                accordance with to the plan and schedule [agreed to by the
                Parties.]

            


    

    


    


    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.

            


    

    
       

      
        
1
        The meaning of the original Chinese text for this provision is clear.


    

     

    
      
        
        

      

      
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              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.

            


    

    


    
      	    
              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): 	Representative (Signature): Signed
	 	 
	
              Date: November
                7, 2003

            	Date: November
              7, 2003


    

    


    
      
        
        

      

      
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