Synthesis Energy Systems Successfully Gasifies High Ash Australian Coal at Commercial Scale Demonstration

HOUSTON, Dec. 20, 2010 /PRNewswire/ -- Synthesis Energy Systems, Inc. ("SES") (Nasdaq: SYMX), a global energy and gasification technology company, announced today the successful completion of a commercial-scale demonstration test in which more than 2,000 tons of high ash coal from Queensland, Australia, were gasified at its Zao Zhuang plant in Shandong Province, China.  The syngas produced during the test met all production performance specifications, including greater than 98% carbon conversion.  The resulting syngas was sold to Hai Hua Coal and Chemical Company.

The test was conducted by SES in response to the significant interest it has received from Ambre Energy of Australia, which intends to build a coal-to-gasoline/LPG plant near Toowoomba, Australia, with a capacity of 18,000 barrels per day.  During the test, SES demonstrated its ability to efficiently process Ambre's low-to-medium rank, 42.6% ash content coal.

Francis Lau, Chief Technology Officer of SES, said, "During this test, conducted with observers from Ambre Energy present, SES achieved carbon conversions of 98% and the gasification process was stable.  Although the Zao Zhuang plant was designed for bituminous middlings waste coal, the test results from Ambre's high ash coal demonstrated once again the flexibility of the SES U-GAS® process to handle a wide range of feedstock compositions, including low rank and high ash content coals."  

"SES's U-GAS® technology demonstrated excellent performance in gasifying our high ash coal," stated Edek Choros, CEO and Managing Director of Ambre Energy. "As a result, we will move forward in our negotiations with SES for a license agreement."

Mr. Choros added, "Most importantly, we witnessed our coal being gasified at the Zao Zhuang plant in real time.  This gave us and our investors in the project added confidence that we can create significant value from our coal reserves."

Lignite and low rank coals are abundant in many regions of the world and are typically the lowest cost coals to mine.  In Australia, for example, this high ash coal can cost up to 90% less on a thermal basis than more widely used low ash, higher rank coals. This saving can be translated into compelling economics for coal based energy and chemical projects.

About Synthesis Energy Systems, Inc.

SES provides technology, equipment and engineering services for the conversion of low rank, low cost coal and biomass feedstocks into energy and chemical products.  Its strategy is to create value through providing technology and equipment in regions where low rank coals and biomass feedstocks can be profitably converted into high value products through its proprietary U-GAS® fluidized bed gasification technology, which SES licenses from the Gas Technology Institute. U-GAS® gasifies coal cost effectively, without many of the harmful emissions normally associated with coal combustion plants.  The primary advantages of U-GAS® relative to other gasification technologies are (a) greater fuel flexibility provided by the ability of SES to use all ranks of coal (including low rank, high ash and high moisture coals, which are significantly cheaper than higher grade coals), many coal waste products and biomass feed stocks; and (b) the ability of SES to operate efficiently on a smaller scale, which enables the construction of plants more quickly, at a lower capital cost, and, in many cases, in closer proximity to coal sources.  SES currently has offices in Houston, Texas, and Shanghai, China.  For more information on SES, visit www.synthesisenergy.com or call (713) 579-0600.

Forward Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are the early stage of development of SES, its estimate of the sufficiency of existing capital sources, its ability to successfully develop its licensing business, its ability to raise additional capital to fund cash requirements for future investments and operations, its ability to reduce operating costs, the limited history and viability of its technology, the effect of the current international financial crisis on its business, commodity prices and the availability and terms of financing opportunities, its results of operations in foreign countries and its ability to diversify, its ability to maintain production from its first plant in the Zao Zhuang joint venture, its ability to complete the expansion of the Zao Zhuang project, its ability to obtain the necessary approvals and permits for its Yima project and other future projects, the estimated timetables for achieving mechanical completion and commencing commercial operations for the Yima project, its ability to negotiate the terms of the conversion of the Yima project from methanol to glycol and the sufficiency of internal controls and procedures. Although SES believes that in making such forward-looking statements its expectations are based upon reasonable assumptions, such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. SES cannot assure you that the assumptions upon which these statements are based will prove to have been correct.

SOURCE Synthesis Energy Systems, Inc.

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