Sinoenergy to Acquire 60% of Lixun Automotive Electronic; Positioning for Growth in Natural Gas Vehicle Market

26 March 2007

Sinoenergy Corporation, a manufacturer of compressed natural gas (CNG) vehicle and gas station equipment, and, a designer, developer and operator of CNG filling stations in China, is acquiring 60% of Jiaxing Lixun Automotive Electronic Company.

Lixun designs and manufactures electric control devices for alternative fuel (CNG/LPG) vehicles, as well as a full range of electric devices used for multi-fueled vehicles. Lixun is one of the largest manufacturers and exporters of conversion kit electric devices in China.

We expect that additional synergies effects can be achieved with our existing conversion kit business and Sinoenergy will be better positioned to participate in the rapid growth of CNG powered vehicles in China.

—Bo Huang, CEO of Sinoenergy Corporation

The US $390,000 cash transaction is expected to be completed before the middle of April.

Earlier in March, Sinoenergy announced that it received approval from the Wuhan municipal government to build four natural gas filling stations in the Wuhan government’s first natural gas filling station construction program. Wuhan Sinoenergy is expected to begin its CNG station operations before September of 2007.

With an area of 3,269 square miles and a population of 8 million, Wuhan is the largest city in central China. It currently has more than 5,000 buses and approximately 20,000 taxis.