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Natural Gas Business

(1) Significant rebound in sales volume of natural gas
During the Reporting Period, due to the rebound in prices of crude oil and coal, the gradual recovery
in the real economy, and the active promotion of air pollution prevention by the State, including
policies such as establishing coal-forbidden areas and promoting replacement of coal by gas, the
Group’s sales volume of natural gas amounted to 836 million cubic meters, representing an increase
of 54.89% as compared with the same period of last year, of which, wholesale volume amounted
to 482 million cubic meters, representing an increase of 23.21% as compared with the same period
of last year; retail sales volume amounted to 319 million cubic meters, representing an increase
of 187.41% as compared with the same period of last year; and the sales volume of CNG/LNG
amounted to 35 million cubic meters, representing a decrease of 6.57% as compared with the same
period of last year.
(2) Steadily proceeding with the construction of natural gas pipeline infrastructure projects
As of 30 June 2017, the aggregate length of the Group’s pipeline in operation was 2,316.8
kilometers. The main part of the project of pipelines for ten counties in central Hebei Province (Phase
II) has been completed and the construction of Xiaoxinzhuang branch (小辛莊支線) was almost
completed. Shanxi Licheng-Hebei Shahe Coalbed Mathane Pipeline Project was almost completed
and is expected to be put into trial operation in the second half of 2017.
(3) Smooth development of CNG and LNG projects
In the first half of 2017, the Group has developed 7 CNG and LNG projects in total. Among them,
construction of Anping compression primary station was completed and it was put into operation. By
the end of the Reporting Period, 7 CNG primary refilling stations, 7 CNG refilling stations and 1 LNG
refilling station of the Group were in operation.

(4) Striving to explore the end-user market of natural gas
During the Reporting Period, the Group newly acquired 11,157 residential customers and 148 nonresidential
customers (78 small traders inclusive). As of 30 June 2017, the Group had an aggregate of
184,106 residential customers and 2,162 non-residential customers (1,399 small traders inclusive).
(5) Forming a gas supply pattern with multi-sources on a long-term basis
During the Reporting Period, the Group established a joint venture company together with Tianjin
Energy Investment Co., Ltd. (天津能源投資集團有限公司) and Shanxi Guohua Energy Co., Ltd.
( 山西國化能源有限責任公司) and intended to build natural gas resource pipelines which connect
Shanxi, Hebei and Tianjin.