Changfeng Energy Inc. ("Changfeng" or the "Company") (TSX VENTURE:CFY), a natural gas utility in China, announced today that the Company has started to sell gas to a ceramics manufacturer in the Pingxiang Industrial Ceramic Park (the "Park") in the Xiangdong district, Pingxiang city, Jiangxi Province, China. It marks the beginning of the commercial operation of the Xiangdong project.

Payment for the purchase of natural gas by the customer was made in advance through the smart card system.

About Xiangdong Piped Gas Distribution Project (the "Xiangdong Project")

The Xiangdong Project, the Company's first piped gas distribution project in Mainland China, was launched in early 2010 and the first phase of construction of the Xiangdong Project inside the Pingxiang Industrial Ceramic Park (the "Park") commenced in November 2011. To date, approximately 7.5 kilometers (4.66 miles) of pipeline has been buried underground, and a set of CNG (compressed natural gas) pressure regulators and gas processing facilities were installed.

The Xiangdong Project is located in Xiangdong District, Pingxiang City, Jiangxi Province, which is approximately 25 kilometers (15.5 miles) away from the city gate loading the gas from the branch of PetroChina's second West to East Pipeline ("WEP II") to Pingxiang City. The section of intra-provincial pipeline between the city gate and the Xiangdong Project location is regulated by the Jiangxi provincial government's energy planning authority and scheduled to be built by the second half of 2013. Prior to completion of the installation of this section of pipeline, no gas from PetroChina's WEP II can be accessed by the Xiangdong District. As a result, the Company intends to purchase CNG and supply gas to its customers through its pipeline and associated facilities.

The Company has the 50 years (2010-2060) for a period of exclusive right to operate the piped gas distribution business in Xiangdong district, within which the Pingxiang Industrial Ceramic Park is located.