Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHU KONG PETROLEUM AND NATURAL GAS STEEL PIPE HOLDINGS LIMITED

珠江石油天然氣鋼管控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1938)

BUSINESS UPDATE ACQUISITION OF LAND USE RIGHT IN INDONESIA

The Board is pleased to announce that on 16 July 2014, PT. Chu Kong Steel, an indirect wholly- owned subsidiary of the Company, entered into a Confirmation Sheet with PT. Suryacipta Swadaya, an independent third party, for the acquisition of the land use right of the Land in Indonesia for approximately USD11.0 million (equivalent to approximately RMB68.3 million). The Company intends that the Land will be used for the construction of a production plant which will tentatively accommodate a production line for cold rolled coil and hot rolled pickled oiled products.

THE ACQUISITION

The Board is pleased to announce that on 16 July 2014, PT. Chu Kong Steel , an indirect wholly-owned subsidiary of the Company, entered into a Confirmation Sheet with PT. Suryacipta Swadaya, an independent third party, for the acquisition of the land use right of the Land in Indonesia for approximately USD11.0 million (equivalent to approximately RMB68.3 million). The Company intends that the Land will be used for the construction of a production plant which will tentatively accommodate a production line for cold rolled coil and hot rolled pickled oiled products.

PRINCIPAL TERMS OF THE CONFIRMATION SHEET

Date : 16 July 2014

Parties :

(i)

PT. Chu Kong Steel, as purchaser;

(ii)

PT. Suryacipta Swadaya, as vendor

Information on the Land
: The Land is situated at Suryacipta City of Industry in Karawang, West
Java, Indonesia.

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The Land has a total site area of 73,703 square metres.
The Land is designated for industrial use. The Company intends that the Land will be used for the construction of a production plant which will tentatively accommodate a production line for cold rolled coil and hot rolled pickled oiled products.
Consideration : The aggregate consideration for the Acquisition is approximately USD11.0 million (equivalent to approximately RMB68.3 million), to be settled by PT. Chu Kong Steel in the following manner:
(1) approximately USD2.2 million (equivalent to approximately RMB13.7 million), representing approximately 20% of the consideration as deposit payment, shall be paid in cash within 14 days after signing of the Confirmation Sheet; and
(2) approximately USD8.8 million (equivalent to approximately RMB54.6 million), representing approximately 80% of the consideration, shall be paid in cash upon the signing of the Land Sale, Purchase and Utilization Agreement and Sale and Purchase of Land Deed (which are expected to be entered into by the parties within 90 days after the signing of the Confirmation Sheet).
The consideration of the Acquisition has been determined by the parties to the Acquisition after arm's length negotiation, taking into account the location and size of the Land.

INFORMATION ABOUT THE GROUP AND PT. SURYACIPTA SWADAYA

The Company is an investment holding company and through its subsidiaries is principally engaged in the manufacture and sales of welded steel pipes. PT. Chu Kong Steel is a newly established company in Indonesia, and initially engaged in the manufacture and sale of cold rolled coil and hot rolled pickled oiled products.
PT. Suryacipta Swadaya is a company incorporated in Indonesia and is engaged in, among other things, the development and management of industrial parks in Indonesia. To the best of the Directors' knowledge, information and belief, and having made all reasonable enquiries, PT. Suryacipta Swadaya is a third party independent of the Company and its connected persons (as defined in the Listing Rules).

REASONS FOR THE ACQUISITION

The Group is principally engaged in the manufacture and sale of welded steel pipes to PRC and overseas customers and currently has four steel pipe production bases in the PRC, which are located in Panyu, Zhuhai, Lianyungang and Jiangyin and one screw thread steel production base in Nanjing.
In order to implement the product diversification strategy of the Group and further penetrate into the Indonesia and South East Asia markets, the Group has decided to establish a production base

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in Indonesia. It is contemplated that the production line for cold rolled coil and hot rolled pickled oiled products to be built on the Land will enable the Group to expand the applications of its products into different industries, including the home appliances and automotive segments. The location of the Land is also close to international vehicle manufacturers, which have strong demand in products manufactured by using advanced cold rolled coil and hot rolled pickled oiled coil products. We believe our state-of-the-art technology will further strengthen our "PCK" brand in Indonesia and the South East Asia regions.
The Board believes that the Acquisition is consistent with the Company's product diversification strategy. The Directors are of the view that the Acquisition is on normal commercial terms which are fair and reasonable, and is in the interests of the Company and its shareholders as a whole.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following expressions have the following meanings:
"Acquisition" the acquisition of the Land by PT. Chu Kong Steel
"Board" the board of Directors
"Company" Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited (珠江石油 天然氣鋼管控股有限公司), a company incorporated in the Cayman Islands
with limited liability and the shares of which are listed and traded on the Stock
Exchange
"Confirmation
Sheet"
the confirmation sheet entered into between PT. Chu Kong Steel and PT. Suryacipta Swadaya on 16 July 2014 in respect of the Acquisition
"Director(s)" the director(s) of the Company
"Group" collectively, the Company and its subsidiaries from time to time
"Land" the land being the subject matter of the Acquisition, the particulars of which are set out in the section headed "Principal terms of the Confirmation Sheet- Information on the Land" in this announcement
"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange
"PRC" the People's Republic of China, which, for the purpose of this announcement,
excludes Hong Kong, the Macau Special Administrative Region and Taiwan
"RMB" Renminbi, the lawful currency of the PRC
"PT. Chu Kong
Steel"
PT. Chu Kong Steel Indonesia, a company incorporated in Indonesia with limited liability and an indirect wholly-owned subsidiary of the Company
"Stock The Stock Exchange of Hong Kong Limited

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Exchange"
"USD" United States Dollar, the lawful currency of the United States of America

For the purpose of illustration only, amounts in this announcement denominated in USD have been translated into RMB at the rate of USD1.00 : RMB6.20.

By order of the Board

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited Chen Chang Chairman

Guangdong Province, the PRC, 16 July 2014

As at the date of this announcement, the Board comprises three executive Directors, namely Mr. Chen Chang, Ms. Chen Zhao Nian and Ms. Chen Zhao Hua; and three independent non-executive Directors, namely Mr. Chen Ping, Mr. Liang Guo Yao and Mr. See Tak Wah.

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