Changfeng''s Xiangdong Piped Gas Distribution Project Starts Selling Gas to Residential Customers

Changfeng Energy Inc. ("Changfeng" or the "Company")  a natural gas utility in China, announced today that, further to its press release dated November 22, 2012, the Company has completed the installation of the main and service pipeline connecting to a gated community and started to sell natural gas to residential customers in the gated community in the downtown area of the Xiangdong district, Pingxiang city, Jiangxi Province, China.

The Company is expecting to eventually connect 2,000 new residential customers and to serve another 8,000 residential customers by upgrading their coke gas fueled facilities to natural gas fueled facilities in the downtown of Xiangdong district.

Payment for the purchase of natural gas by residential customer will be made in advance through the IC card system. A one-time connection fee also will be paid by residential customers before the connection.

About Xiangdong Piped Gas Distribution Project (the "Xiangdong Project")

The Xiangdong Project, the Company's first piped gas distribution project in Mainland China, was launched in early 2010 and the first phase of construction of the Xiangdong Project inside Pingxiang Industrial Ceramic Park (the "Park") commenced in November 2011. To date, approximately 13.5 kilometers (8.4 miles) of pipeline has been buried underground, and a set of CNG (compressed natural gas) pressure regulators, gas processing facilities and a citygate were installed.

The Xiangdong Project is located in Xiangdong district, Pingxiang City, Jiangxi Province, which is approximately 25 kilometers (15.5 miles) away from the PetroChina's citygate in Pingxiang City which receives the gas from a branch of PetroChina's WEP II. The section of intra-provincial pipeline between PetroChina's citygate and the Xiangdong Project location is regulated by the Jiangxi provincial government's energy planning authority and is scheduled to be built in the second half of 2013. Prior to completion of the installation of this section of pipeline, no gas from PetroChina's WEP II can be accessed by the Xiangdong district. As a result, the Company decided to purchase CNG and supply gas to its customers through its pipeline and associated facilities.

The Company has a 50 year (2010-2060) exclusive right to operate the piped gas distribution business in the Xiangdong district, within which the Park is located. The population in the Xiangdong district is approximately 500,000 people.

(marketwire.com,edited by Topco)