-- Expands into Two Additional Cities in Shaanxi Province, China -- NEW YORK, July 8 /PRNewswire-FirstCall/ -- China Natural Gas, Inc. (OTC:CHNG) (BULLETIN BOARD: CHNG) , one of the leading providers of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi'an, China, announced today that it has acquired three CNG filling stations located in Xi'an City, Tongchuan City and Yan'an City, respectively, in the Shaanxi Province of China. The filling stations have all of the government permits to operate and are now selling natural gas for CNG powered vehicles. Today's announcement brings the Company's total revenue generating CNG filling stations to 31. "Today's announcement marks a major step in our CNG filling station network expansion as we enter into two new markets in the Shaanxi Province. As one of the first natural gas suppliers to enter Tongchuan City and Yan'an City, we expect to continue to capitalize on the demand for compressed natural gas from a growing population of vehicle owners. We estimate there are approximately 60,000 and 70,000 vehicles in Tongchuan City and Yan'an City, respectively, of which only one percent are currently using compressed natural gas. Vehicles powered by gasoline can be readily converted to CNG/gasoline hybrid at our auto conversion division at very low cost. With soaring crude oil prices and the recent increase in the retail price of gasoline in China, we believe we are well positioned to capture this market opportunity," stated Mr. Qinan Ji, CEO and Chairman of the Board of China Natural Gas, Inc. About China Natural Gas, Inc. China Natural Gas, Inc., ("CHNG"), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi'an, China. Xi'an is a fast growing Chinese city supported by a population of approximately eight million and is the "gateway" to the broad Western regions of China. CHNG has three business segments: retail natural gas at company-owned filling stations, end user delivery of natural gas services to residential, commercial and industrial customers, and conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi'an. This press release may contain forward-looking statements. These statements are based on the current expectations or beliefs of China Natural Gas, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the fluctuation of natural gas prices, the availability of natural gas supplies, changes in governmental regulations and/or economic policies and our ability to penetrate the new markets. CONTACT In the U.S.: Ashley Ammon MacFarlane or Wei-Jung Yang Integrated Corporate Relations 203-682-8200 In Asia: Dan Joseph Integrated Corporate Relations, Inc. +86 10 8523 3087 DATASOURCE: China Natural Gas, Inc. CONTACT: In the U.S.: Ashley Ammon MacFarlane, or Wei-Jung Yang, +1-203-682-8200, or In Asia: Dan Joseph, +86-10-8523-3087, all of Integrated Corporate Relations, Inc., for China Natural Gas, Inc. Web site: http://www.naturalgaschina.com/

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