09:24 CHINA GAS HOLD<00384> - Announcement & Resumption (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. CHINA GAS HOLDINGS LIMITED (incorporated in Bermuda with limited liability) (Stock Code: 384) MEMORANDUM OF UNDERSTANDING This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules. Reference is made to the Company's announcement dated 11 January 2005 in response to an article appearing in Hong Kong Daily News on 11 January 2005 reporting the possible subscription of Shares by the government of Singapore, India and/or South Korea. The Directors are pleased to announce that on 24 January 2005, the Company entered into the MOU with City Gas setting out the principles in respect of a number of strategic and business cooperation opportunities between the parties, including a possible subscription of new Shares amounting to no more than 10% of the enlarged total issued share capital of the Company and the formation of joint venture companies. Trading in Shares on the Stock Exchange was suspended at the request of the Company from 9:30 a.m. on 24 January 2005 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in Shares at 9:30 a.m. on 25 January 2005. This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules. Reference is made to the Company's announcement dated 11 January 2005 in response to an article appearing in Hong Kong Daily News on 11 January 2005 reporting the possible subscription of Shares by the government of Singapore, India and/or South Korea. The Directors are pleased to announce that the Company entered into the MOU with City Gas, an independent third party, on 24 January 2005 and both parties have agreed to commence friendly negotiations along the principles set out in the MOU in respect of a number of strategic and business cooperation opportunities between the parties. Hereinbelow is a summary of the understanding between the parties as set out in the MOU: 1. the Company agreed in principle to cooperate with City Gas as its strategic investor and City Gas consented in principle to subscribe for new Shares amounting to no more than 10% of the enlarged total issued share capital of the Company; 2. the Company agreed to establish a gas management and service joint venture company in the PRC to be owned as to 49% by the Company and as to 51% by City Gas; and 3. the Company and City Gas agreed to cooperate in investing in natural gas projects in the PRC through (i) investments by City Gas in the Company's new natural gas projects; and (ii) participation by City Gas in the Company's existing natural gas projects. City Gas is a company engaged in the natural gas business and wholly owned by Temasek Holdings, the exclusive pipeline gas operator in Singapore. City Gas was formed in 1861 and has a corporate history of over 140 years. It is one of the oldest natural gas companies in Asia. City Gas currently supplies pipeline gas to over 560,000 dwellings and 150,000 industrial customers in Singapore. City Gas has technical and operational know how in gas distribution and considerable knowledge, experience and expertise in carrying out the business of marketing and retailing as to commercial and domestic markets within Singapore. City Gas also has a good service record amongst its customers and other stakeholders. Both parties have agreed in principle under the MOU to establish a strategic cooperation committee to discuss further on the transactions contemplated thereby and as set out above. There cannot be any assurance that definitive agreement(s) will be signed between the parties. The Company will make further announcement(s) as and when appropriate to keep shareholders of the Company informed. The Directors wish to emphasize that since the MOU is not legally binding and the transactions under the MOU may or may not proceed, public investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. The Directors wish also to inform the public and its shareholders that the Company is still in discussions and negotiations with the India