China Leason Announced Production Commencement of its RMB320 Million Investment, LNG Plant Phase 1 with 500,000 m3 Daily Capacity; Becomes the Largest Liquefied Coalbed Gas Supplier in the PRC.

Hong Kong, June 22, 2009 - (ACN Newswire) - The largest liquefied coalbed gas supplier in the PRC, China Leason Investment Group Co., Limited (HKSE code: 8270)("China Leason"/ "the Group") announced today that liquefied natural gas ("LNG") plant Phase 1, which is located at Qinshui County of Shanxi Province, the PRC and with a daily production capacity of 500,000 m3, commenced production on 18 June 2009. At present, it is the largest unconventional liquefied natural gas ("LNG") plant in the PRC.

Shanxi Qinshui Shuntai Energy Development Co., Ltd. ("Qinshui Shuntai") is the wholly-owned subsidiary of China Leason. Qinshui Shuntai was established in November 2006, the total investment for the LNG plant Phase 1 was approximately RMB320 million, and the daily production capacity reaches 500,000 m3. Phase 1 of the LNG plant was constructed in 2007. The construction of LNG plant Phase 2 with the same daily production capacity of 500,000 m3 will start immediately. It is anticipated that LNG plant Phase 2 will start production in the 2nd quarter of 2010. The total daily production capacity will then reach a total of 1 million m3.

There is a growing demand for natural gas in the PRC. The Group's end-users include power plants; ceramic enterprises, gas companies, gas stations,and aluminium manufacturers. At present, its LNG products are mainly sold to provinces include Guangxi, Guangdong and Fujian, as well as regions such as Huadong, Huabei and Northeastern. At the moment, the daily demand of its target markets reaches2 million m3 and above.

Mr. Wang said, "Our plants are located at Qinshui Basin, which is the only commercialized coalbed gas base operating in the PRC, and the Group for the time being is the largest enterprise to develop and operate liquefied coalbed gas project in the PRC. The PRC has already become the second largest energy consuming country. In light of the huge potential in the natural gas market in the PRC, the demand for coalbed gas is far more than the supply, while the energy marketgrows steadily. It has planned to cover a comprehensive upstream and downstream value chain in order to create synergy effect when the Group started the construction. It has already achieved this with endeavor. It is believed that in the near future, under the leadership of our experienced management team, we can contribute the maximum return for our shareholders."

To secure stable gas supply, the Group has closed cooperation with China United Coalbed Methane Corp. Ltd. and Shanxi Jincheng Anthracite Mining Group Lanyan Coalbed Methane Co. Ltd., which have the largest proven coalbed gas reserves in the Qinnan area.

Exploitation and transportation are the two utmost important factors restricting the development of coalbed gas industry. As one of the natural gases, the transportation of coalbed gas is much more difficult than that of petroleum. Natural gas is refrigerated at -162 degrees, it exists in the liquid state, called liquefied natural gas (LNG), which the volume is 625 times less than its gaseous state. As the volume of LNG is small and pressured, it is very suitable for long-distant transportation. Mr. Wang said, "Compared with the long pipeline needed by natural gas, LNG is characterized as a small investment withflexible outlay. We liquefied the coalbed gas into easily transportable LNG and ranks number 1 in the industry."

"The Group focuses on exploring application market, distribution network and logistic business in order to develop a comprehensive LNG value chain. The upstream of the property is the largest liquefied coalbed gas plant in Qinshui County of Shanxi Province of the PRC. The middle of the property chain is LNG logistics companies and to prepare to build LNG logistics safety surveillance centres. The downstream of the property chain is Guangxi Beiliu Natural Gas Co Ltd. to develop new application market of natural gas."

In which Beiliu Natural Gas was purchased by RMB12 million in 2009, located at the Beiliu town in Yulin region of Guangxi Province, which is the hometown of ceramics industry. It has natural gas reserve stations and 127 kilometers of city pipeline networks. The daily capacity of transporting gas reaches 400,000 million m3 in the future, there is a huge demand for natural gas in the Beiliu regional market; the daily consumption reaches 560,000 m3 when all 102 ceramic kilns of ceramic industry use LNG. Mr. Wang said, "The implication of acquiring Beiliu Natural Gas is to complete the value chain for the tremendous regional markets."

Moreover, to satisfy the LNG demand from regions such as Beijing, Tianjin and Liaoning, the Group and Xianxian local government of Hebei Province has chosen Dachenzhuang, which is located at China National Highway106, China National Highway 307 and Interchange of Shihuang Expressway. It is prepared to establish LNG product "Logistics System Safety & Surveillance Management Center". The preparation is finished and the operation is expected to commence in 2010.In 2008, the Group set up a joint venture with Shanxi local enterprise to establish Shanxi Wanzhi Logistics Co., Ltd. The transportation fleet secures the delivery of the Group's LNG product.

Looking forward, the Group first will put more focus on exploring traditional markets, supply gas to the ceramic, glass, food, plastic, leather processing and alunminium industries at its production base. Furthermore, it plans to explore the emerging oil to gas conversion project of LNG market, explorefuels for large-scale heavy vehicles, focus on vehicles transporting of coal and ironstones, and to build gas stations by choosing regions with high-traffic and comparatively regular routes.

Mr. Wang concluded, "Looking forward, we hope to further improve and optimize the property chain, explore the new way of transporting LNG, drive into the market of oil to gas conversion in heavy vehicles, and to build Phase 2, Phase 3 of LNG project, and the exploration of coalbed gas. To achieve the objectives, it plans to increase the daily capacity to 1.5 million m3 of liquefied natural gas within 3 years, explore gas station, terminal residential market, and upstream market, to maintain the status of being the largest liquefied coalbed gas supplier in the PRC." About China Leason

China Leason was listed on the Growth Enterprise Market ("GEM") of the Stock Exchange of Hong Kong Limited in 2003. It is the largest liquefied coalbed gas supplier in the PRC. China Leason is principally engaged in the sales of liquefied natural gas ("LNG") products, terminal market application, LNG logistics and relevant project services. The Group has a LNG plant in Qinshui county of Shanxi Province, the PRC, with production capacity reaches 500,000 m3 per day.

Source: China Leason

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