China Oil And Gas Group Limited (the "Company") (stock code: 603) and its subsidiaries (the "Group") are principally engaged in investment in natural gas and energy related business. Gas operations of the Group include piped city gas business, pipeline design and construction, as well as transports, distributes, sales of compressed natural gas ("CNG") and liquefied natural gas ("LNG").

As a piped city natural gas service provider, the Group supplies city natural gas through long-distance transmission pipelines. With 27 secured franchise operation rights, the Group has built up city pipeline networks which offer stable and sufficient natural gas resources to local household, industrial, commercial and other users.

As a non-pipeline natural gas provider, the Group has established 2 LNG factories in Qinghai Province which is now come up on top within the People's Republic of China ("PRC") in terms of its processing capacity. Meanwhile, the Group has also built certain CNG primary stations to ensure our supply of natural gas is secured and stable all year round. These facilities support supplies of natural gas to cities not yet covered by the pipeline networks and are treated as emergency backup gas sources for our Group.

As a major national operator of natural gas stations for automobile natural gas filling, the Group has built dozens of natural gas stations across the country. Automobiles can be converted into natural gas operation system by paying an affordable fee. Some of the provinces will provide subsidy to automobile owners who are willing to convert their automobile into natural gas operating system. With supports from the PRC governments, our Group is offering inexpensive, clean and environmental friendly natural gas energy to the transportation sector.

Together, the Group has developed natural gas transport and logistics enterprises in the PRC. The Group has already set up LNG and CNG fleets which reinforced the mobility and coverage of our natural gas supplies. Year by year, consumption of natural gas has been increased rapidly in the percentage among the energy consumption within the PRC.