China’s rapid economic growth, industrialization, and urbanization over the last 30 years has lifted some 400 million people out of poverty, but also created new environmental challenges. China is now the largest source of SO2 and NOX emissions, and responsible for 60% of the global increase in carbon emissions over the last ten years. This is largely attributable to China’s heavy reliance on coal (70%) and oil (17%), with natural gas only accounting for 4% of energy consumption. To address climate change and environmental degradation challenges, the Chinese government is promoting the use of natural gas and renewable energy, and clean technologies, as well as improvements on energy efficiency. In its 12th Five-year Plan on greenhouse emission control, China set its new goals of reducing carbon emissions per unit of national income in the next five years from 2010 by 17 % and called for pilot programs that aim to promote a low-carbon economy.

The proposed project is to build and operate around 500 liquefied natural gas (“LNG”) fueling stations with an objective to make LNG available as a cleaner and cheaper substitute of diesel for long-haul buses and heavy trucks along the key transportation lines across 14 provinces in China (the “Project”).

A typical LNG truck will have 90% fewer NOX and PM emissions than a diesel truck, 100% fewer SOX emissions, and 30% fewer Greenhouse Gas (GHG) emissions. LNG fuel also enjoys very favorable economics over petroleum– with fuel cost savings typically reported in the 30% range as compared to diesel. The objective of the Project is to, together with other similar projects currently undertaken by other gas distribution companies, build a country-wide LNG distribution network in China that will make LNG available to thousands of long-haul buses and heavy trucks along the major inter-province highways and it is expected that the increased availability of the LNG will stimulate a broad conversion of heavy trucks and long haul buses from traditionally being diesel powered to gas powered.