Document:

Unassociated Document

     

    Natural
Gas (CNG) Purchase Agreement with Jiyuan Yuhai

     

    Party A:
Jiyuan City Yuhai Gas Co., Ltd.

    Party B:
Xian Xilan Natural Gas Co., Ltd.

     

    According
to the "Contract Law of People’s Republic of China" and other related laws and
rules, all parties, according to the principles of equality, willingness,
impartiality and credit, entered into agreement based on the following terms and
conditions.

    
       

      
        	
                I、 
      

              	
                Location
      of supplying CNG:

              

      

      
        
          	 	 	 
	 	
                  1、

                	
                  Through
      Party A’s parent station and its appointed locations, Party A will provide
      coal-bed methane to the locations appointed by Party B.

                
	 	 	 

        

      

      
        
          	 	
                  2、

                	
                  At
      the delivery location, Party A will issue the transaction bill as an
      effective certificate for the transaction between the buyer and the
      seller. The buyer and the seller will each designate a person to confirm
      delivery by signing the documents.

                
	 	 	 

        

      

      
        
          	 	
                  3、

                	
                  The
      ownership and risks of the coal-bed methane will transfer from Party A to
      Party B at the delivery location, and Party B will be responsible for
      further processing and usage.

                
	 	 	 

        

      

      
        
          	 	
                  4、

                	
                  Party
      A will deliver the coal-bed methane to Party B at the delivery location,
      and the delivery pressure is 200Pa, subject to ±5%
      fluctuations.

                

        

      

    

     

    
      	
              II、

            	
              Supplying
      Term: Long-term

            

    

     

    
      	
              III、

            	
              Coal-bed
      Methane Supply:

            

    

    In
principle, the supply of coal-bed methane for each year cannot be less than the
supply amount for the year before. Party A delivers gas pursuant to the notice
of Party B, and shall not affect the normal operation of Party B to its best
effort. The current temporary daily gas supply is 150,000NM3 per
day.

     

    
      	
              IV、

            	
              Measuring
      Standard:

            

    

    Natural
gas supply is calculated by volume (standard being NM3). It should be executed
in accordance with the People's Republic of China’s oil and natural gas industry
standard SY/T6143-2004 - "Using standard flowmeter to measure the supply of
natural gas".

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              V、

            	
              Measuring
      Status:

            

    

     

    The
standard reference conditions for natural gas volume measurement are: (i) the
temperature should be 293.15K (20oC), and (ii) the
absolute pressure should be 101.325Kpa (1 standard atmospheric
pressure).

     

    
      	
              VI、

            	
              Quality
      and Specifications:

            

    

    The low
calorific value of every standard cubic meter of coal-bed methane should be 8000
kcal (8000 kcal or 33.44 MJ) or above; the amount of methane per standard cubic
meters should be more than 90%; the total sulfur, hydrogen sulfide, and carbon
dioxide contents should be not be higher than the CB17820-1999 Class 1 of the
People’s Republic of China's Gas Quality Standards. The natural gas provided by
Party A will satisfy the volume of natural gas required by the normal use of
natural gas-powered motor vehicles.

     

    
      	
              VII、

            	
              Price:

            

    

    
      
        	 	 	 
	 	
                1、

              	
                The
      two parties agree that the price of the coal-bed methane sold by Party A
      to Party B is RMB1.55 yuan per standard cubic meter.

              
	 	 	 

      

    

    
      	 	
              2、

            	
              During
      the performance of the contract, if the price of natural gas changes due
      to the impact of national policies, both of the parties should negotiate
      and confirm the price, which cannot be higher than the price offered to
      other customers of Party A.  If parties cannot reach an
      agreement, either party should have the right to terminate this purchase
      agreement.

            

    

     

    
      	
              VIII、

            	
              Settlement
      and Payment:

            

    

    
      
        	 	 	 
	 	
                1、

              	
                Party
      B will pay cash to Party A as prepayment; Party A will issue the receipt
      upon payment.

              
	 	 	 

      

    

    
      
        	 	
                2、

              	
                During
      the term of this agreement, the price of natural gas being supplied by
      Party B is RMB 1.55 per NM3. Both parties will
      settle their accounts on a monthly basis and the settlement date is the
      twenty-fifth day of each month. Party A should provide Party B with an
      invoice. When the prepayment is used up, Party A must notify Party B to
      make the prepayment immediately. If Party B does not pay the prepayment in
      time, Party A has the right to terminate its supply of natural gas. If
      Party A terminates the supply without any proper reasons, Party A should
      pay RMB3,000 per day to Party B as penalty.

              
	 	 	 

      

    

    
      	 	
              3、

            	
              On
      the twenty-fifth of each month, Party A should issue a settlement sheet
      according to the sales receipt signed by the two parties. The settlement
      sheet should show the amounts owed by Party B for the supply of coal-bed
      methane delivered to Party B during the period from the twenty-fifth of
      the previous month to the twenty-fourth of this
  month.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                4、

              	
                After
      Party B receives the settlement sheet and before the twenty-ninth of that
      month, Party B should affix its seal on settlement sheet and fax it back
      to Party A if it is accurate.

              
	 	 	 

      

    

    
      
        	 	
                5、

              	
                The
      amount of prepayment stated on the receipt issued by Party A prevails over
      other documents. If the prepayment is delayed for more than two days,
      Party A should give written notice to Party B requesting for prepayment
      within three working days. If Party B declines to make such prepayment
      without any proper reason, Party A can take any necessary actions against
      Party B and may eventually terminate the supply of coal-bed methane to
      Party B.

              
	 	 	 

      

    

    
      
        	 	
                6、

              	
                If
      mistakes on the settlement sheets of Party A leads to overpay or underpay,
      either party has the right to request the other party to offset the
      overpaid or underpaid amount within five working days after the mistakes
      in the settlement sheets have been corrected.

              
	 	 	 

      

    

    
      
        	 	
                7、

              	
                Both
      of parties should resolve any disputes through their reasonable effort and
      friendly negotiation. If the dispute cannot be resolved, then each party
      can commence any necessary legal proceedings.

              
	 	 	 

      

    

    
      
        	 	
                8、

              	
                During
      the term of this agreement, if parties have disputes regarding the
      settlement amount, Party B should prepay the undisputed part of the
      settlement amount. When the dispute is resolved, the amount will be
      adjusted according to the result. The final adjusted amount should be paid
      within five working days.

              

      

    

     

    
      	
              IX、

            	
              Undertakings:

            

    

    
      
        	 	 	 
	 	
                1、

              	
                According
      to the terms and conditions of this agreement, with the exception of force
      majeure, both parties guarantee to deliver and purchase the coal-bed
      methane that Party B needs.

              
	 	 	 

      

    

    
      
        	 	
                2、

              	
                Both
      parties of this agreement are companies which are duly incorporated in
      accordance with the laws. Both parties have the authority to sign this
      agreement and are capable of implementing and carrying out the provisions
      of this agreement.

              
	 	 	 

      

    

    
      
        	 	
                3、

              	
                At
      the time of execution of this agreement, there are no sentencing,
      judgment, ruling or specific administrative acts which will have
      significant adverse impact on the performance of this
      agreement.

              
	 	 	 

      

    

    
      	 	
              4、

            	
              Both
      parties have received the necessary internal authorization to execute this
      agreement. The signatories of both parties are the legal representatives
      or effective authorized representative of each
  party.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              X、 

            	
              Force
      Majeure:

            

    

    
      
        	 	 	 
	 	
                1、

              	
                The
      party, which cannot perform this agreement or do so in accordance with the
      terms and conditions of this agreement, or needs to postpone the
      performance of the agreement, due to force majeure, should provide
      effective proof. Then such party will not be liable for the delay during
      the force majeure period.

              
	 	 	 

      

    

    
      	 	
              2、

            	
              If
      any party fails to perform this agreement due to its own fault and an act
      of force majeure occurs during the delayed period, which causes the
      agreement not performed, partly not performed or delay of performance, the
      party at defraud is liable for breach of
  contract.

            

    

     

    
      	
              XI、

            	
              Dispute
      Resolution

            

    

    For any
disputes which arise between the parties, both parties should make their best
effort to negotiate and resolve. If it cannot be resolved, either party can
commence court proceedings in the People's Court at the location of Party
B.

     

    
      	
              XII、

            	
              As
      for any other outstanding issues, the two parties can make further
      negotiation, and enter into a supplemental agreement. The supplemental
      agreement has the same legal effect as this
  contract.

            

    

     

    
      	
              XIII、

            	
              This
      agreement is executed in five copies with two copies for Party A and three
      copies for Party B. This agreement shall become effective upon signing and
      sealing by the two parties.

            

    

     

    Party A:
Jiyuan City Yuhai Gas Co., Ltd.

    Authorized
representative: Haiyu Liu

    Date:
February 28, 2008

     

    Party B:
Xian Xilan Natural Gas Co., Ltd.

    Authorized
representative: Huaifu Zhang

    Date:
February 28, 2008

     

    
      
        
        

      

      
        4COAL-BED
METHANE (CNG) SUPPLY AGREEMENT

     

    
      
        	
                Party A:

              	
                JIYUAN
      SALES BRANCH OF JINCHENG MINGSHI COALBED METHANE UTILIZATION CO.,
      LTD

              

      

    

     

    
      
        	
                Party B:

              	
                XI’AN
      XILAN NATURAL GAS CO., LTD

              

      

    

     

    
      Contract
date: March 20, 2008

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      
        	
                Party A:

              	
                JIYUAN
      SALES BRANCH OF JINCHENG MINGSHI COALBED METHANE UTILIZATION CO.,
      LTD

              

      

    

     

    
      
        	
                Party B:

              	
                XI’AN
      XILAN NATURAL GAS CO., LTD

              

      

    

     

    Based on
the principle of honesty, creditability, fair and mutual benefit, after
sufficient consultation, both parties have reached the following
agreement:

    

    
      
        Article 1: Party A
agrees to provide coal-bed methane to Party B by the CNG
method.

      

    

    

    Article 2: Gas supply
period

    Term:
From April 1, 2008 to March 31, 2013

    

    Article
3: Transfer mode and gas quantity

    Party A
will be responsible to transport the coal-bed methane to Party B’s CNG station
and connect to its equipments.

    

    Article
4: Quality of the coal-bed methane

    The
coal-bed methane provided by Party A to Party B at the delivery place shall
conform to the relevant technical standard related to standard GB17820-1999. The
minimum low calorific value is 8150 kcal.

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Project

                              	
                                Technical  Indicators

                              
	 
      	 
      
	
                                Methane

                              	
                                More
      than 93%

                              
	 
      	 
      
	
                                Gross
      calorific value, MJ/m3

                              	
                                More
      than 31.4

                              
	 
      	 
      
	
                                Ethane

                              	
                                Trace

                              
	 
      	 
      
	
                                Hydrogen
      sulfide

                              	
                                Less
      than 6 mg/ Nm3

                              
	 
      	 
      
	
                                Sulfur
      dioxide

                              	
                                Below
      3.0%

                              
	 
      	 
      
	
                                Low
      calorific value

                              	
                                More
      than 8100 calories

                              
	 
      	 
      
	
                                Dew
      point of water

                              	
                                Under
      pressure and temperature at the delivery location, at least 5 degrees
      higher than the lowest environmental temperature.

                                 

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Article
5: Price of coal-bed methane

    The
settlement of coal-bed methane should be in accordance with Party A's upstream
gas supply.  Considering the strategic cooperation relationship with
Party B, the price during the contract period should be RMB 1.75/m3

    

    Article
6: Settlement

    The
parties shall settle the account monthly based on actual usage.

    

    Article
7: Responsibilities and obligations

    1. Party
A’s responsibilities and obligations

    (1) Party
A should provide steady supply of qualified gas to Party B in accordance with
the provisions of this contract, and Party A is responsible for the safety in
the period from the time the car leaves the compressed station till the
unloading of natural gas at Party B’s station.

    (2) Other
than the annual maintenance of the equipments, Party A also needs to perform
regular maintenance for the power lines and equipments to guarantee the normal
supply of gas; if Party A needs to suspend gas supply due to regular
maintenance, it shall send a written notice one or two days in advance to Party
B so that Party B will have adequate time for preparation before the gas supply
is suspended.

    (3) Party
A shall notify Party B, as soon as possible, for sudden failure of lines and
equipments or other breakdown (non-force majeure) causing suspension of gas
supply.

    2. Party
B’s responsibilities and obligations

    
      	
               

            	
              
                (1)

              

            	
              Party
      B shall timely settle the payment with Party A in accordance with the
      provisions of this contract. If Party B fails to do so, from the second
      day of the deferred payment, Party B shall pay 0.05% of accounts payable
      per day as the penalty. If Party B delays the payment for more than 15
      days, Party A will reduce the quantity of daily gas supply, and will not
      guarantee minimum supplies; all of the consequential losses shall be borne
      by Party B.

            

    

    
      	
              
              

            	
              (2)

            	
              Party
      B should give Party A written notice 3 to 5 days in advance regarding any
      regular maintenance. When the maintenance finishes, Party B shall deliver
      written notice to Party A 3 to 5 days in
  advance.

            

    

    
      	
              
              

            	
              (3)

            	
              Party
      B shall provide written notice to Party A for any sudden failure of
      devices and equipments and operation breakdown causing suspension of gas
      supply (non-force majeure).

            

    

    

    Article
8: Confidentiality

    From the
date of execution of this contract until 5 years after the expiration of this
contract, the contract terms and any relevant information shall be kept
confidential in accordance with this agreement. Without the prior written
consent of the other party, either party shall not disclose the terms of this
contract in whole or in part to a third party. Party at default shall bear all
the economic losses caused.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Article
9: Responsibility of breach of contract

    If either
party is unable to perform the contract due to the breach of the agreement, the party at default shall be liable to compensate the other party for the
losses caused.

    

    Article10:
Force majeure

    Prompt
notice shall be issued to the other party, in the event of force majeure events,
such as war, earthquake, flood, sabotage, restriction and prohibition on roads
implemented by relevant departments, traffic accident, bad weather which affects
transportation, natural disasters etc. Supporting evidence should be provided
within a reasonable period and remedial measures should be implemented to
minimize the damages caused.

    If one
party fails to fulfill the contract due to force majeure, some or all of the
responsibility could be waived depending on the impact of the force
majeure.

    

    Article
11: Other matters

    1. In the
event of disputes between the parties, the disputes shall be resolved through
consultation; and if such consultation fails, either party has the right to bring the dispute to the
Jincheng People's Court.

    2. During
the contract period, both parties shall not assign the rights and obligations
under this contract.

    3. All
notices and other communication between the parties must be delivered and
confirmed in written form.

    4.  Any
matters not mentioned in this agreement shall be settled through negotiations
between the parties. The supplementary provisions are
equally effective.

    

    Article
12:

    This
contract is executed in quadruplicate, and each party holds two
copies.

    

    Article
13:

    The
contract effective date and validity: This contract shall come into force after
the signing and sealing of both parties.

    

    
      
        	
                Party A: JIYUAN
      SALES

              	 
      	
                Party B: XI’AN
      XILAN

              
	
                BRANCH
      OF JINCHENG

              	 
      	
                NATURAL
      GAS CO., LTD (seal)

              
	
                MINGSHI
      CBM

              	 
      	
                Cao
      Lixia (signaure)

              
	
                UTILIZATION
      CO., LTD (seal)

              	 
      	
                March
      20

              
	
                Zhao
      Chengbin(signaure)

              	 
      	 
      

      

    

     

    
      
         

      

      
        4

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