Exhbit
      10.12

    


    


    Construction
      with Investment and 

    Management
      of CNG-LNG

    


    Project
      Contract

    


    


    


    


    


    


    


    


    


    


    January
      26, 2007

    
       

      
         

      

      
         

        
          

        

      

      
         

      

    


    This
      contract is signed by both parties on January 26, 2007 in Xuancheng
      City.

    


    Parties
      of this Contract:

    


    People’s
      Government of Xuancheng City, Anhui Province
      (hereinafter referred to as Party A)

    Legal
      Representative: Gao Dengbang

    


    China
      New Energy Development Investment Company Limited
      (hereinafter referred to as Party B)

    Legal
      Representative: Wang Zhenhong

    


    Sinoenergy
      Corporation
      (hereinafter referred to as Party B)

    Legal
      Representative: Deng Tianzhou

    


    In
      order
      to promote local economic development and in accordance with relevant
      regulations of Contract
      Law of the People’s Republic of China
      and
Company
      Law of the People’s Republic of China,
      both
      parties come to an agreement and sign this contract on Party B invest and
      construct CNG-LNG project in Xuancheng City upon the principle of mutual benefit
      and friendly consultation.

    


    Clause
      I Content and Scale of the Project

    1.1
      Party
      A agrees China New Energy Development Investment Company Limited and Sinoenergy
      Corporation to collectively invest and construct CNG-LNG (Compressed and
      Liquefied Natural Gas) project in Xuancheng City, Anhui Province. Scale of
      the
      project: annual natural gas processing capacity is 300 million m3,
      the
      product in initial period is CNG, and the product in future period is LNG.
      Target of natural gas is settled by Party B.

    1.2
      Total
      investment of the project is USD 28 million (refer to the Feasibility Research
      Report submitted by Party B).

    1.3
      Party
      B makes registration in Industrial and Commercial Administration Bureau of
      Xuancheng City to found “Anhui New Energy Company Limited” with registered
      capital of USD 5 million in cash.

    


    Clause
      II Scope, Price and Payment of Land for Construction

    2.1
      Party
      A transfers a piece of land of 60Mu to Party B at one time (located in Tianhu
      Town, Economic Development Zone, Xuancheng City) as industrial land, price
      of
      transfer is CNY 112,000/Mu (refer to Clause I of the appendix for relevant
      contents of the price), and term of use is 50 years. Transfer of the land is
      executed in accordance with relevant regulations of China.

    2.2
      Payment is executed according to the Transfer
      Contract of Use Right of State Land
      signed
      between Party B and Municipal Bureau of State Land and Resources.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Clause
      III Schedule of the Project

    After
      acquiring approval documents and land, construction of this project shall be
      started within 12 months and actualized according to the schedule defined in
      the
      Feasibility Research Report.

    


    Clause
      IV Programming and Construction

    4.1
      Party
      A provides land with “Five Connections and One Flatness” for Party B (refer to
      Clause II of appendix).

    4.2
      Party
      B must develop and use the land according to the use, term and conditions
      regulated in relevant laws and Transfer
      Contract of Use Right of State Land.
      Party B
      can consign designers with relevant qualifications to make programming and
      design without violating relevant regulations, and transact capital construction
      procedure after being examined and approved by relevant
      authorities.

    


    Clause
      V Conditions of Construction

    Party
      A
      shall assist to provide basic establishments of electricity and water, etc.
      and
      road red lines connected to land of the project.

    


    Clause
      VI Management and Administration

    6.1
      Production and management of Party B must comply with relevant laws and
      regulations of China, protect state benefits and maintain market order of fair
      competition.

    6.2
      Party
      B shall execute relevant laws and regulations on labor protection, protect
      legal
      rights and benefits of employees, participate in social security system and
      support work of relevant associations.

    6.3
      Party
      B shall execute state financial system, submit accountant report forms and
      statistic report forms to relevant agencies and accept supervision of relevant
      departments of local government.

    


    Clause
      VII Environment Protection and Safe Production

    7.1
      Party
      B shall ensure environment protection, fire protection and safe production
      to
      reach the “Three Simultaneities” during actualizing the project.

    7.2
      The
      project of Party B shall legally fulfill environment appraisal procedure, and
      exhaust of the “Three Wastes” shall reach the state standard.

    7.3
      During construction and production of the project, Party B shall perform fire
      protection and safe production strictly according to relevant state regulations
      and legally fulfill safety appraisal procedure.

    


    Clause
      VIII Rights and Obligations

    Party
      A:

    1.
      After
      the project is put into production, enterprise income tax enjoys the “Two
      Remissions and Three Deductions” policy, and local kept part of value-added tax
      and other taxations and fees are executed according to the most preferential
      policies of the country and Economic Development Zone of Xuancheng
      City.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    2.
      Party
      A shall ensure the right of legal gas management of Party B in Xuancheng
      City.

    3.
      Party
      A shall assist Party B on various approvals during construction and management.
      Party A shall be responsible for temporary land requisition from the factory
      of
      Party B to “Deliver Gas of Sichuan to East Part” Xuancheng Substation High
      Temperature Pipeline Construction, and Party B shall pay relevant
      expenses.

    4.
      Party
      A shall pledge that Party B has adequate independence of management. Party
      B
      shall have the right to confirm plan of production and management, collect
      and
      use funds, purchase materials for production, organize production and sell
      products.

    5.
      Party
      A shall pledge that Party B has adequate right of labor use. Party B can confirm
      setup of department and employees according to requirement of production and
      management.

    6.
      Party
      A shall pledge to provide “On-off” services for the project invested by Party B
      and settle relevant problems during construction of the project.

    Party
      B:

    1.
      Party
      B shall pledge that investment of the project is invested on schedule, and
      shall
      not privately alter invested project without consent of Party A.

    2.
      Party
      B shall pledge to make management and pay taxation legally.

    3.
      Party
      B shall employ employees in accordance with relevant laws and regulations,
      legally confirm distribution and level of salaries according to management
      and
      economic profits, which shall not be lower than the minimum level of Xuancheng
      City and pay pension, unemployment insurance, medical insurance, industrial
      injury insurance and procreation insurance.

    4.
      Party
      B shall accept administration of Party A and comply with various systems of
      administration of Xuancheng City.

    


    Clause
      IX Supplement

    This
      agreement is in 6 original copies, and each party shall keep 3 of them, and
      this
      agreement shall come into force after being signed and sealed by both
      parties.

    


    Appendix:

    


    I.
      Explanation on Price of Land

    The
      price
      of the land transferred by Party A is CNY 112,000/Mu, including:

    1.
      Fees
      of approval and certificate;

    2.
      Price
      of Transferred Land (including all land requisition compensations and removing
      expenses);

    3.
      Other
      administrative expenses related with land certificates.

    


    II.
      Explanation on “Five Connections and One Flatness”

    Party
      A
      shall pledge that the land provided for Party B is in conformity with basic
      standard of construction land of development zone.

    “Five
      Connections” means road (road standard of development zone), electricity (double
      loops), water, CATV and telecommunication. “One Flatness” means the land is
      backfilled and leveled up according to vertical control.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    Party
      A:
      People’s Government of Xuancheng City, Anhui Province

    Representative:
      s/
      Gang Zhang 

    Title:
      Administrative Deputy Mayor

    Seal:
      People’s Government of Xuancheng City

    


    Party
      B:
      China New Energy Development Investment Company Limited

    Representative:
      s/
      Zhenghong Wang 

    Title:
      Chairman

    Seal:
      China New Energy Development Investment Company Limited

    


    Party
      B:
      Sinoenergy Corporation

    Representative:
      s/
      Tianzhou Deng 

    Title:
      Chairman

    Seal:
      Sinoenergy Corporation

    


    


    Date:
      January 26, 2007