China Integrated Energy Inc a leading non state owned integrated energy company in the People's Republic of China announced that four gas station leases entered into in 2008 have been terminated by Shaanxi Highway Service Co Ltd reducing the total number of the Company gas stations from thirteen to nine. Shaanxi Highway has recalled all of the 32 gas stations that are currently being leased by Shaanxi Highway to third parties including the four gas stations leased by the Company.

On May 20 2008, the Company leased four gas stations for operation from Shaanxi Highway. The annual lease payment for each gas station was approximately USD 437,000. The Company was required to make the lease payments for all four gas stations in advance in five-year increments. The first five-year aggregate lease payment of USD 8,747,631 has been paid by the Company to Shaanxi Highway.

Each gas station will be inspected by Shaanxi Highway, and upon its approval, the Company will receive the pro-rated portion of the prepaid lease payment by April 30 2011. The Company expects the aggregate returned amount to be approximately USD 3,970,496.

Mr Gao Xincheng Chief Executive Officer of China Integrated Energy Inc said "As mentioned in my letter to shareholders on March 23, 2011, since early 2010, the cost of acquiring or leasing retail gas stations has escalated significantly in China, primarily as a result of increased competition to buy gas stations from state-owned petroleum companies working in cooperation with foreign entities. Given the fierce competition that exists now in the retail gas station market in China and we will continue to evaluate organic and acquisition opportunities in all three of our business segments - biodiesel production, wholesale distribution and retail gas stations - to prudently deploy available resources to achieve the greatest investment return."