Concentrations

6 Months Ended

Jun. 30, 2013

Note 13 –Concentrations

Concentration of natural gas vendors:

	Three months ended						Six months ended
	June 30,						June 30,
	2013			2012			2013			2012
Number of natural gas vendors		4			4			4			4
Percentage of total natural gas purchases		93	%		82	%		90	%		83	%

As of June 30, 2013 and December 31, 2012, the Company had $146,342 and $407,717, respectively, prepayment to its major suppliers.

The Company maintained long-term natural gas purchase agreements with one of its vendors, Qinshui Lanyan Coal Bed Methane Co., Ltd (“Qinshui Lanyan”) as of June 30, 2013. The Company does not expect any issues or difficulty in renewing the supply contracts with these vendors going forward.

- Definition

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

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China Natural Gas, Inc. 10-Q