[Stamp
      Tax]


    


    URBAN
      GAS DEVELOPMENT AGREEMENT

    


    Party
      A: Construction
      Bureau of Shenzhou Town

    


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

    


    Date: February
      27, 2004

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    URBAN
      GAS
      DEVELOPMENT AGREEMENT

    


    Contract
      SN: 

    Signatory
      Location:


    


    Party
      A: Construction
      Bureau of Shenzhou Town

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


    


    Chapter
      I
General
      Principles

    


    
      	1.1  	
              WHEREAS,
                (i) the Government of Shenzhou Town agrees to authorize Party B the
                exclusive right to develop, construct and operate the pipeline gas
                project
                in the urban area of Shenzhou Town (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 Shenzhou
                Town (the
                “Agreement”).

            


    

    


    Chapter
      II Parties

    


    
      	2.1  	
              Construction
                Bureau of Shenzhou Town (hereinafter referred to as “Party
                A”)

            


    

    Legal
      address:  No.
      31
      Yongan Street, Shenzhou Town, Hebei Province

    Tel.:  (0318)
      3325318

    


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

            


    

    


    
      	3.2  	
              Name
                of the Company: Shenzhou
                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.

            


    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Chapter
      IV Business
      Scope

    


    
      	    
              4.1	
              Business
                Scope of the Company: within
                the urban planned area of Shenzhou 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.

            


    

    


    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 Shenzhou Town and guaranties that Party B has
                the
                exclusive right to develop and construct the pipe gas project within
                the
                urban planned area of Shenzhou Town for 25
                years.

            


    

    


    
      	5.2  	
              Party
                A will consider extending the 25 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.
                

            


    

    


    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 10,000 units with the total investment of approximately
                RMB
                55 million. 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 Shenzhou Town for 25
                years
                and ensure the legality thereof; not to approve any new pipe gas
                project
                during such time; to guarantee that the pipeline networks constructed
                by
                Party B in Shenzhou Town pursuant to this Agreement accept natural
                gas
                when the long natural gas pipeline reaches Shenzhou Town, and the
                continual operation of the pipeline
                network;

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
            	6.2.2	
              to
                agree that the initial residential installation fee shall be RMB
                2,100/unit for each household and the residential gas price shall
                be RMB
                2.3 per cubic meter. The initial installation fee for commercial
                customers
                shall be the cost of gas consumption for one day at the price of
                RMB 300
                per cubic meter;

            


    

    


    
      	
            	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 Shenzhou Town. 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%.

            


    

    


    
      	    
              6.3	
              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  	
              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.

            


    

    


    
      	6.3.7  	
              gradually
                increasing the ratio of the natural gas in urban energy consumption;
                to
                strictly controlling the amount of coal consumption and effectively
                controlling the air pollution; not approving the industrial project
                that
                relies on coal as its energy source if natural gas is available in
                the
                urban area.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	    
              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;

            


    

    


    
      	6.4.3  	
              ensuring
                the continuous and safe gas supply except in the case of force majeure;
                dealing with casualties and economic loss due to the gas supply.
                If the
                gas is cut off for 24 hours, Party B shall compensate for actual
                loss of
                the customers. Party B shall inform the customers in advance if the
                pipes
                needs examining and repairing, and resume the gas supply within 4
                hours.
                Party A shall warn first and thereafter has the right to terminate
                the
                exclusive right granted to Party B if cutting off of the gas supply
                occurs
                several times;

            


    

    


    
      	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.

            


    

    


    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.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	    
              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	
              There
                are four originals of this agreement. This Agreement and any of its
                supplemental agreements shall not be binding upon any Party unless
                signed
                and sealed by the Parties.

            


    

    


    
      	Party A (Seal): Sealed 	Party B (Seal): Sealed
              
	 	 
	Representative (Signature): Signed	Representative (Signature): Signed 
	 	 
	
              Date:
                February
                27, 2004

            	Date: February
              27, 2004 


    

    


    
      
        
        

      

      
        6