Construction with Investment and Management of CNG-LNG Project Contract February 1, 2007
Exhbit
10.13
Construction
with Investment and
Management
of CNG-LNG
Project
Contract
February
1, 2007
This
contract is signed by both parties on February 1, 2007 in Huangmei
County.
Party
A: People’s Government of Huangmei County, Hubei Province
Party
B: Sinoenergy Corporation
China
New Energy Development Investment Company Limited
In
order
to promote local economic development and in accordance with relevant
regulations of Contract
Law of the People’s Republic of China
and
Company
Law of the People’s Republic of China,
both
parties come to an agreement and sign this contract on Party B makes investment
in Huangmei County upon the principle of mutual benefit and friendly
consultation.
Clause
I Introduction of Investors
Sinoenergy
Corporation, which is a company listed in NASDAQ, mainly deals with urban
natural gas pipeline network, natural gas station and LNG processing factory
in
China. In 2004, it annexed Qingdao General Machinery Factory, a large state
enterprise in Qingdao to manufacture various pressure containers and natural
gas
equipments. In 2006, it founded automobile natural gas projects in Wuhan,
Pingdingshan and Baotou, etc. At present, its total investment in China is
over
CNY 200 million.
China
New
Energy Development Investment Company Limited, which is a new energy investment
company registered in Hong Kong, mainly deals with investment to natural gas
projects in China, and also pays attention to other energy fields such as wind
energy, solar energy and biological energy, etc. In recent 3 years, it has
founded 5 large CNG master stations in Zhengzhou, Nanjing and Wuhu, etc., and
become the largest dealer of CNG master station in China.
Clause
II Content and Scale of the Project
1.1
Party
A agrees Party B to invest and construct CNG-LNG (Compressed and Liquefied
Natural Gas) project in Huangmei County. Scale of the project: annual natural
gas processing capacity is 300 million m3,
the
product in initial period is CNG, and the product in future period is LNG.
Target of natural gas is settled by Party B.
1.2
Total
investment of the project is USD 28 million (refer to the Feasibility Research
Report submitted by Party B).
1.3
The
registered capital is USD 5 million in cash.
Clause
III Schedule of the Project
Relevant
permit procedures and applicable policies shall be confirmed since the date
signing this agreement.
Clause
IV Scope, Price and Payment of Land for Construction
2.1
Party
A transfers a piece of land of 50Mu to Party B at one time (located beside
“Deliver Gas of Sichuan to East Part” substation) as industrial land, price of
transfer is CNY 74,660/Mu (refer to the appendix for relevant contents of the
price), and term of use is 50 years. Transfer of the land is executed in
accordance with relevant regulations of China.
2.2
Payment is executed according to the Transfer
Contract of Use Right of State Land
signed
between Party B and the Bureau of State Land and Resources.
Clause
V Programming and Construction
4.1
Party
A provides land with “Five Connections” close to “Deliver Gas of Sichuan to East
Part” substation for Party B (refer to Clause II of appendix). Party A shall
assist to provide basic establishments with “Five Connections” such as
electricity and water, etc. and road red lines connected to land of the project.
Party B shall pay relevant expenses.
4.2
Party
B must develop and use the land according to the use, term and conditions
regulated in relevant laws and Transfer
Contract of Use Right of State Land.
Party B
can consign designers with relevant qualifications to make programming and
design without violating relevant regulations, and transact capital construction
procedure after being examined and approved by relevant
authorities.
Clause
VI Management and Administration
6.1
Production and management of Party B must comply with relevant laws and
regulations of China, protect state benefits and maintain market order of fair
competition.
6.2
Party
B shall execute relevant laws and regulations on labor protection, protect
legal
rights and benefits of employees, participate in social security system and
support work of relevant associations.
6.3
Party
B shall execute state financial system, submit accountant report forms and
statistic report forms to relevant agencies and accept supervision of relevant
departments of local government.
Clause
VII Environment Protection and Safe Production
7.1
Party
B shall ensure environment protection, fire protection and safe production
to
reach the “Three Simultaneities” during actualizing the project.
7.2
The
project of Party B shall legally fulfill environment appraisal procedure, and
exhaust of the “Three Wastes” shall reach the state standard.
7.3
During construction and production of the project, Party B shall perform fire
protection and safe production strictly according to relevant state regulations
and legally fulfill safety appraisal procedure.
Clause
VIII Rights and Obligations
Party
A:
1.
After
the project is put into production, enterprise income tax enjoys the “Two
Remissions and Three Deductions” policy, and local kept part of value-added tax
and other taxations and fees are executed according to the most preferential
policies of the country and Huangmei County.
2.
Party
A shall ensure the right of legal gas management of Party B.
3.
Party
A shall assist Party B on various approvals during construction and management.
Party A shall be responsible for temporary land requisition from the factory
of
Party B to “Deliver Gas of Sichuan to East Part” Huangmei Substation High
Temperature Pipeline Construction, and Party B shall pay relevant
expenses.
4.
Party
A shall pledge that Party B has adequate independence of management. Party
B
shall have the right to confirm plan of production and management, collect
and
use funds, purchase materials for production, organize production and sell
products.
5.
Party
A shall pledge that Party B has adequate right of labor use. Party B can confirm
setup of department and employees according to requirement of production and
management.
6.
Party
A shall pledge to provide “On-off” services for the project invested by Party B
and settle relevant problems during construction of the project, and actively
harmonize relationship between Party B and relevant departments and surrounding
areas.
Party
B:
1.
Party
B shall pledge that investment of the project is invested on schedule, and
shall
not privately alter invested project without consent of Party A.
2.
Party
B shall pledge to make management and pay taxation legally.
3.
Party
B shall employ employees in accordance with relevant laws and regulations,
legally confirm distribution and level of salaries according to management
and
economic profits, which shall not be lower than the minimum level of Huangmei
County and pay pension, unemployment insurance, medical insurance, industrial
injury insurance and procreation insurance.
4.
Party
B shall accept administration of Party A and comply with various systems of
administration of Huangmei County.
Clause
IX Supplement
This
agreement is in 6 original copies, Party A shall keep 2 of them, and Party
B
shall keep 4 of them, and this agreement shall come into force after being
signed and sealed by both parties. This agreement is nonexclusive, if there
are
other companies firstly acquiring natural gas resources from Sinopec, Party
B
shall unconditionally agree Party A to sign contracts with them.
This
contract has no rights and obligations with any third party.
Appendix:
I.
Explanation on Price of Land
The
price
of the land transferred by Party A is CNY 74,660/Mu, including:
1.
Land
Requisition Compensation (Land Compensation and Labor Settlement
Subsidy);
2.
Fees
of approval of land;
3.
Price
of Land Transfer;
4.
Other
administrative expenses related with land certificates.
II.
Explanation on “Five Connections”
“Five
Connections” means road, electricity for construction, water for construction,
CATV and telecommunication.
Party
A:
People’s Government of Huangmei County, Hubei Province
Representative:
/s/Chunshe
Ye
Title:
Deputy Magistrate
Seal:
People’s Government of Huangmei County
Party
B:
Sinoenergy Corporation
Representative:
/s/
Tianzhou Deng
Title:
Chairman
Seal:
Sinoenergy Corporation
Party
B:
China New Energy Development Investment Company Limited
Representative:
/s/
Xxxxxxxxx Xxxx
Title:
Chairman
Seal:
China New Energy Development Investment Company Limited
Date:
February 1, 2007
