Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

       Date of Report (Date of earliest event reported): January 10, 2006

                             CHINA NATURAL GAS, INC.
             (Exact name of registrant as specified in its charter)

          Delaware                    000-31539                98-0231607
          --------                    ----------              ------------
(State or other jurisdiction of  (Commission File Number)   (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                      Tang Xing Shu Ma Building, Suite 418
                                 Tang Xing Road
                               Xian High Tech Area
                             Xian, Shaanxi Province
               (Address of principal executive offices) (zip code)

              (Registrant's telephone number, including area code)

                                   Copies to:
                               Marc J. Ross, Esq.
                              Thomas A. Rose, Esq.
                       Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                              Phone: (212) 930-9700
                               Fax: (212) 930-9725

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR

[ ] Soliciting  material  pursuant to Rule 14a-12 under the Exchange Act (17 CFR

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.
Item 3.02 Unregistered Sales of Equity Securities.

     On January 10, 2006 through January 13, 2006,  China Natural Gas, Inc. (the
"Company"),  entered into  securities  purchase  agreements with four accredited
investors and completed the sale of $2,195,198 of units.  The units contained an
aggregate of 783,999  shares of common stock and 213,422  common stock  purchase
warrants.  Each common stock  purchase  warrant is  exercisable  for a period of
three  years at an exercise  price of $3.60 per share.  Pursuant to the terms of
the warrant,  each investor has contractually  agreed to restrict its ability to
exercise the warrants to an amount which would not exceed the difference between
the  number  of  shares  of common  stock  beneficially  owned by the  holder or
issuable  upon  exercise  of the  warrant  held by such  holder  and 9.9% of the
outstanding  shares of common stock of the Company.  New York Global  Securities
acted as the placement agent of the transaction.

     The Company is obligated to file a registration  statement  registering the
resale of shares of the Company's  common stock and those issuable upon exercise
of the warrants. If the registration  statement is not filed within 45 days from
the date of investment,  or declared  effective  within 90 days  thereafter (135
days if the registration statement receives a full review by the SEC), or if the
registration  is suspended  other than as permitted in the  registration  rights
agreement between the Company and the investors, the Company is obligated to pay
the investors certain fees in the amount of 1% of the aggregate amount invested,
per month, and the obligations may be deemed to be in default.

     In connection with the offering, the Company paid a placement fee of 10% of
the proceeds in cash, together with non-accountable expenses in the amount of 3%
of the proceeds,  in cash. In addition,  the placement agent was issued warrants
to purchase  121,955  shares of common stock on the same terms and conditions as
the investors.

Item 9.01 Financial Statements and Exhibits.

 (c) Exhibits

Number   Description

10.1        Form of Securities Purchase Agreement*
10.2        Form of Common Stock Purchase Warrant*
10.3        Form of Registration Rights Agreement*

* Previously filed with the Company's Current Report on Form 8-K, Date of Event:
January 6, 2006, and incorporated herein by reference.



     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                             CHINA NATURAL GAS, INC.

Dated:  January 17, 2006            By: /s/ MINQING LU                  
                                    Minqing Lu,
                                    Chief Executive Officer