China Natural Gas, Inc. (CHNG) is principally engaged in the distribution and sale of natural gas to commercial, industrial and residential customers in the Xian area, including Lantian County and the Lintong and Baqiao Districts of Shaanxi province of The Peoples' Republic of China through a network of approximately 120 kilometers of high-pressure pipelines. The Company also distributes and sells compressed natural gas (CNG) as a vehicular fuel through a network of CNG fueling stations in Shaanxi and Henan Provinces. As of December 31, 2008, CHNG owned and operated 23 CNG fueling stations in Shaanxi Province and 12 CNG fueling stations in Henan Province. In October 2008, the Company acquired Lingbao Yuxi Natural Gas, Co., Ltd. through Xi’an Xilan Natural Gas Co., Ltd. In December 2008, CHNG acquired Henan Lingbao Yuxi Natural Gas Limited.