November 22, 2007 -- Sinoenergy Corporation, a producer of compressed natural gas (CNG), announced the completion of its acquisition of the remaining shares of Xuancheng Sinoenergy Vehicle Gas Ltd. Co., (Xuancheng Sinoenergy), in which it had held a 30 percent interest. Sinoenergy paid $930,000 for the 70 percent equity and $860,000 for two plots of lands in downtown Xuancheng City, on which three CNG filling stations will be built. These stations are expected to go into operation in the coming months. In March 2007, Sinoenergy set up Xuancheng Sinoenergy Automobile Gas Company to build and operate CNG filling stations.

"We are excited to complete this equity transaction, which increases our holding in Xuancheng Sinoenergy from 30 percent to 100 percent, providing us with a platform to expand our presence in Anhui Province, and creating ample demand to support our future growth," Tianzhou Deng, chairman of Sinoenergy Corporation told Emerging China. The company plans to build up to 10 CNG filling stations in Xuancheng City and the surrounding areas. Currently, three stations are under construction.

"Natural gas powered vehicles emit 87 percent less nitrogen oxide and 70 percent less carbon monoxide than gasoline powered vehicles. As a clean energy with the potential to ameliorate the pollution problem and with increasing government support, the market demand for CNG use in vehicles will be immense," Xiling Liu, a CNG expert of the Chinese Academy of Aeronautics said in a research report.

"Sinoenergy has seized the positive momentum in China's CNG-powered vehicle market. Sinoenergy's net revenue for the first half of 2007 was $8.8 million, a 50 percent increase over the same period of 2006. Sinoenergy has appointed Sinopec as its supplier to secure up to 400 million cubic meters of natural gas for its subsidiaries per year," Fan Zhou, media relations officer of CCG Elite Investor Relations Inc, a leading US-based global investor relations firm working with Sinoenergy to handle the acquisition, told Emerging China.

According to Deng, Sinoenergy plans to build its own network of CNG filling stations and develop a retail and wholesale business across China. In the company profile, Deng explained that the company would deemphasize its construction services for third party operators, and reiterated the need to have wholly-owned subsidiaries.

Sinoenergy has received government approval to build and operate CNG filling stations in Wuhan in Hebei, Pingdingshan in Henan, Xuancheng in Auhui, Jiaxing in Zhejiang and Henghang in Hunan. In September 2007, two CNG filling stations were completed in Wuhan and these have already begun distributing compressed natural gas to vehicles.

"We are now focusing on expanding our CNG filling station network in Central and South East China. We expect to become the largest CNG filling station owner/operator in mainland China by the year 2009," Huang Bo, CEO of Sinoenergy Corporation told Emerging China.

Sinoenergy is a manufacturer of compressed natural gas, vehicle and gas station equipment as well as an operator of CNG stations in China. The company also manufactures a wide variety of pressure containers used in the petroleum and chemical, metallurgy, electricity generation and food and brewery industries. Sinoenergy was founded in July, 2004 and is based in Qingdao, Shandong.