On 1 July 2011, Song County Tian Lun Gas Limited (“Song County Tian Lun”), a wholly owned subsidiary of the Company, and Housing and Urban-Rural Construction Bureau of Song County entered into the “Agreement in relation to the Urban Pipelined Gas Exclusive Operation Rights in Song County”, pursuant to which, Song County Tian Lun obtained gas exclusive operation rights for a term of 30 years.

Gas market profit of Song County

In 2007, People’s Government of Song County introduced Song County Tongte Pipeline Gas Co ., Ltd （「Tongte Gas」）to invest and manage urban gas business of Song County through investment attraction. Until now, Tongte Company has already completed construction of urban nature gas network, but gas supply has not achieved.

Obtain concession rights

In order to achieve gas supply as soon as possible, to improve living conditions and environmentt of Song County residents, Housing and urban bureau of Song County has entered into agreement with Henan Tian Lun on July 17 2010, agreed Henan Tian Lun to establish a wholly-owned subsidiary Song County Tian Lun to acquire business assets of Tongte gas in Song County. After that, Tongte Gas would exit gas market of Song County, Housing and urban bureau of Song County granted Song Conty Tian Lun gas concession rights.

Development perspectives

Song County is located in the transmission substation of Minggao Town, West-East PipelineⅡ to Luanchuan gas branch connection pipe mouth, which can guarantee the plenty of gas supply of Song County for future development.

Song County is praised as one of the 8 top gold-producing counties in China where leading industries such as precious metal smelting industry, mining industry and machinery manufacturing industry have been formed.

The expansion in new urban area of Song County is under planning, whilst the area will be doubled after the expansion. Meanwhile, as Song County is an important city close to Luoyang City, a major industrial city in China, the emigration of considerable industrial enterprises from Luoyang City will provide a broader market for the development of natural gas business in Song County.

Through obtaining gas consessin rights of Song County, the group will not only expand numbers of business areas, bring good profits for future development ,but also make a good foundation for expansion of gas markets of western Henan Province.