LNG-Powered Ship in Chinese Waterways

China Natural Gas, Inc. (Nasdaq GM: CHNG), a provider of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial, and residential use in Xi'an, China, announced that a ship powered by liquefied natural gas (LNG) and modified by the company successfully completed its test navigation in Wuhan on August 3, 2010. The event is the first time an LNG-powered ship has navigated in China's domestic waterways, demonstrating that LNG can be used both in cars and ships as a transportation fuel.

The company succeeded in fueling a tugboat weighing over 300 tons with LNG for Wuhan Ferry Company. The ship now runs on a fuel formula of 30% diesel and 70% natural gas, representing significant energy and cost savings.

The Chairman of the board & CEO of the company, Qinan Ji, said. "This achievement is a big step in the history of China's new energy industry and will contribute to environmental protection and reduce energy consumption. The marketing of LNG-powered ships will be implemented on a full scale in the forthcoming years. Our fully owned subsidiary, Hubei Xilan Natural Gas, Ltd., will cooperate with the Wuhan Ferry Company in the passenger transport business to explore further applications for this revolutionary kind of vessel. We expect to achieve extensive coverage with our LNG-powered ships along the Yangtze River."

“This latest success proves that advanced dual-fuel hybrid power technology for ships is an economical, reliable, and energy-saving environmental technology. Ship modification engineering is a leading technology in China, and we plan to apply for the appropriate patents in ship modification. This technology will strengthen our competitiveness to an unprecedented level. As we fully embrace China's national campaign for energy saving, emission reduction, low-carbon waterways, and green navigation, the Company will benefit from being on the leading edge of the nation's shift toward clean energy sources."