Compressed Natural Gas Supply Contract

This Contract is signed between the following parties:

Supplier (Party A): Huojia County Hualong Petrochemical Co., Ltd.

Purchaser (Party B): Xi’an Xilan Natural Gas Co., Ltd

Both parties agreed to compliant with equality, mutual benefit, the principle of honesty and trustworthiness. Both parties agreed the following compressed natural gas supply terms and conditions and sign to confirm the execution of the contract.

The contract had been signed by both parties on 16th November 2009 at Huojia County in Henan province.

I.	Supplying object

Supplying object is compressed natural gas.

1.	Validity of the contract and supplying period

1.1

The validity of the contract is five years. Starts from 1st January 2010 and end on 31st December 2015.

1.2

The date of start supplying compressed natural gas is 1st January 2010.

II.	Source of compressed natural gas

In the contract source of compressed natural gas must be the compressed natural gas from the pipeline under the government’s development plan delivering natural gas from the west to the east.

III.	Transfer location and transfer mode

1.	Party A must deliver the compressed natural gas to the location designated by Party B. The quality of compressed natural gas is determined by the supplying station high pressure flow measurement of Party A.

2.	Both parties transfer executors must grant authority from their enterprise and party B transfer executor must sign off delivered compressed natural gas per vehicle trip.

IV. Price and settlement

1.	Settled Price: Both parties agreed that compressed natural gas price is RMB2.4 yuan per standard cubic meter (if company does not need value-added tax invoice, the price can be settled as 2.12 yuan per standard cubic meter.).

2.	Company should prepay the fund to purchase compressed natural gas.

3.	The settled date is the 24th for each month, according to the compressed natural gas sales amount to purchasers from the 25th of last month to the 24th of this month, and the day-measurement certificate which supplier gives to purchasers, supplier and purchase party can settle the due balance.

 

 

V. Right and Responsibility for both parties

5.1 Supplier’s Right and Responsibility

5.1.1 Supplier should notice the purchasers 3 days before Supplier make annual maintenance on production equipment or there is other reason to cause production stopped.

5.1.2 If the emergency happed or others caused gas supply stopped, supplier should inform purchaser in time and confirm this matter. And the supplier should inform the purchasers 3 days before the gas supply return to normal supply.

5.2 Purchaser’ Right and Responsibility

5.2.1 Purchaser should pay the money within the period agreed in contract. If purchaser cannot timely pay the money, supplier can take some actions after noticing to purchaser, such as stop gas supply or limit the gas supply.

5.2.2 Purchaser should notice the supplier prior Supplier make annual maintenance on production equipment or there is other reason to cause production stopped.

5.2.3 If the emergency happed or purchaser want to stop gas supply stopped for any other reason, purchaser should inform supplier in time, and provide stop gas supply timetable to supplier, so that supplier can make arrangement accordingly.

VI. Liabilities1. Supplier’s LiabilitiesIn any emergency situation such as equipment maintenance or break down which prevents the Supplier to supply natural gas without notification to the Purchaser; Supplier will be liable for any direct or indirect losses. 2. Purchaser’s LiabilityIn any emergency situation such as equipment maintenance or break down which prevents the Purchaser to purchase natural gas without notification to the Supplier; Purchaser will be liable for any direct or indirect losses. 3. Any force majeure issues happening have material affect either party’s obligation. This agreement will be terminated.4. Any force majeure issues caused one party cannot carry out its obligations; this party should liable for the losses of another party. VII. Solution of Dispute1. Any dispute, disagreement, argument or claim over this Agreement will be negotiated by both parties. Any unsolved dispute will be ruled by the local arbitration commission. VIII. Additional Clause1. All provisions and information with respect to the agreement must keep in confidential, during of which, each party can not reveal any or all provisions or information of the agreement to any third party.   2.  Any uncovered issues over this Agreement will be negotiated by both parties. Amendment may be made when necessary and bears same legal force with this agreement. 3. The agreement will be in quadruplicate with same full legal force, two copies to be held by each party. Supplier: Huojia County Hualong Petrochemical Co., LtdAuthorized Representative:Purchaser: Xi’an Xilan Natural Gas Co., LtdAuthorized Representative: