TIANJIN, China, Dec. 21 /PRNewswire-Asia-FirstCall/ -- China New Energy Group Company (OTC:CNER) (BULLETIN BOARD: CNER) ("China New Energy" or the "Company"), a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China, announced that on December 12, 2009, Qinhuangdao Chensheng Gas Co., Ltd. ("Qinhuangdao"), the Company's indirect wholly-owned subsidiary, entered into an equity purchase agreement (the "Agreement") to acquire all of the outstanding equity interest of Zhanhua Jiutai Gas Co., Ltd. ("Jiutai") for RMB 16.5 million (approximately $2.4 million). The purchase price is payable in three installments. The first installment of 58% of the total purchase price is payable within 13 business days of the date of the Agreement. The second installment consists of 36% of the total purchase price and is payable upon Jiutai passing a comprehensive inspection of all of its gas stations and pipe network and obtaining a passed inspection report issued by the supervisory department. The third and final installment is for 6% of the purchase price and will be paid within the twelfth month after the completion of delivery of the transferred equity. Founded in 2007 and headquartered in Zhanhua County, Shandong Province, Jiutai is primarily engaged in the business of natural gas supply, construction and development of gas pipeline networks in urban areas. On April 25, 2007, Jiutai obtained a 50-year exclusive right and operating license from the local government to construct and develop a gas pipeline network and supply gas in Zhanhua County. "Our acquisition of Zhanhua Jiutai Gas Company allows us to expand our geographic footprint to a very promising market in the Shandong Province of China," said Mr. Yangkan Chong, Chief Executive Officer. "This acquisition is in-line with our strategy of expanding our business into under-penetrated, growing small- and medium-sized cities where we can enter into favorable franchise agreements with local governments that grant us long-term exclusive rights to develop the local natural gas distribution network and supply natural gas in their area." About China New Energy Group Company China New Energy Group Company ("China New Energy" or the "Company") is a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China. The Company generates revenues primarily from the connection fees it charges its customers for interconnecting to pipelines in its natural gas distribution networks, and fees for natural gas usage. The Company currently has exclusive natural gas distribution rights for Acheng, Dashiqiao, and Nandaihe, three cities located in Northern China. For more information, please visit http:/// http://www.cnegc.com/ . Safe Harbor Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to access natural gas for distribution, and ability to identify and develop operational locations under favorable terms, changes in natural gas pricing mechanism imposed by the Chinese government, changes in the regulatory environment and future national or regional economic and competitive conditions, and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For more information, please contact: Company Contact: Eric Yu, Chief Financial Officer Email: Web: http://www.cnegc.com/ Investor Relations Contact: CCG Investor Relations Mr. Athan Dounis, Account Manager Phone: +1-646-213-1916 Email: Mr. Crocker Coulson, President Phone: +1-646-213-1915 (New York) Email: Webs: http://www.ccgirasia.com/ DATASOURCE: China New Energy Group Company CONTACT: Eric Yu, Chief Financial Officer of China New Energy Group Company, ; or Investors, Mr. Athan Dounis, Account Manager, +1-646-213-1916, or Mr. Crocker Coulson, President, +1-646-213-1915 (New York), , both of CCG Investor Relations, for China New Energy Group Company Web site: http://www.cnegc.com/ http://www.ccgirasia.com/

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