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China Natural Gas Update

|Includes:China Natural Gas, Inc. (CHNG)

China Natural Gas (OTC:CHNG) announced an update for its power supply agreement with local government.  On March 25, 2009, CHNG announced that it had an agreement with the Yulin local government providing about RMB20 million to build a transformer substation for CHNG's liquified natural gas plant.  Now, Yulin municipal government doubled its investment to RMB 40 million (about US$6 million) for the transformer substation.  This investment will ensure stability and capacity of the electricity supply for CHNG's LNG plant.  For detail of the press release, please see finance.yahoo.com/news/China-Natural-Gas...

In the press release, CHNG is expecting an increase in the natural gas price in the near future.  This is good news for CHNG as the gas price is controlled by the central government and is at artificially low level.  The increase will make the China natural gas price closer to the market price.  At the current gas price, CHNG continues to increase its earning.  Imagine how the price increase can help the earning figure in the future.

The stock is down for the last couple of days in sympathy with the sell-off in the China stock market.  For long-term investors, you should consider gradually increase your holding.  But then again, the stock market seems to be heading lower and you may be able to get the stocks at a lower price.  So, I suggest to invest 1/3 of your planned investment, and buy more when the stocks drop even lower.

Stocks: CHNG