Synthesis Energy Systems Signs MOU with Hongye for Large Scale Glycol Project

Synthesis Energy Systems Signs MOU with Hongye for Large Scale Glycol Project

Exclusive Agreement for Supply of SES Technology and Equipment for 600,000
Tonnes-Per-Year Glycol Plant in Inner Mongolia, China

PR Newswire

HOUSTON, Oct. 15, 2013

HOUSTON, Oct. 15, 2013 /PRNewswire/ --Synthesis Energy Systems, Inc. (NASDAQ:
SYMX) ("SES") announced today that its subsidiary company, SES New Energy
Technologies (Shanghai) Co., Ltd., has entered into a Memorandum of
Understanding ("MOU") with Hongye International Investment Group Co., Ltd.
("Hongye"), for the supply of SES' gasification technology, equipment and
services to Hongye's 600,000 tonnes-per-year glycol plant to be built in the
Inner Mongolia Autonomous Region of China.

(Logo: http://photos.prnewswire.com/prnh/20130710/NY45085LOGO) 

The MOU agreement was formally signed yesterday in Los Angeles, California, at
the China Enterprise Council's Seminar on US States - China Provinces Economic
and Trade Cooperation and CEC Annual Meeting. The China delegation was led by
Chairwoman Ms. Bu Xiaolin of the Inner Mongolia Autonomous Region. This is a
region of strategic importance and the center for the development of China's
growing coal-to-chemicals industry as designated in Beijing's twelfth
Five-year plan. This large coal-to- chemicals project will be located in the
Qianlishan Industrial Zone in Wuhai City, Inner Mongolia, China.

Hongye has received pre-approval for this project from the Development and
Reform Commission of the Inner Mongolia Autonomous Region, and further
approvals required to advance the project are currently being sought. The
total project investment is expected to be approximately 9.5 billion RMB, with
construction taking place over a two-year period. Under the terms of the MOU,
Hongye, the largest shareholder of SES, intends to use SES' Gasification
Technology to convert the plant's low quality coal feedstock into syngas,
which will then be converted to glycol.

Additionally, both companies have agreed to work exclusively on this project
for the next 12 months while the technology licensing, equipment supply and
technical service agreements are completed. During this period, Hongye will be
managing the development of the project, including obtaining the remaining
necessary government approvals.

Hongye's chairman, Mr. Gao Feng, stated, "SES' gasification technology is well
suited for our glycol project because of the technology's ability to cleanly
and cost effectively convert our local lignite and other low quality coals
from Inner Mongolia into syngas. Inner Mongolia is well suited for the
application of SES' gasification technology, especially since it is a region
with planned growth in the coal chemical industry of China and is rich in
these types of low quality coals. In Inner Mongolia, we are also very focused
on managing limited water resources and this was another strong point for our
selection of SES as their technology uses much less water than is typical of
other gasification technologies." Mr. Gao added, "Because of these factors,
Hongye's current strategic cooperation with SES is not limited to our two
companies, but also is one that I believe could play a very important role in
creating a business model in Inner Mongolia for establishing energy
independence and supply security for China over the long term. We look forward
to advancing the next steps of this project together with SES."

"Hongye has a strong presence in the coal industry in Inner Mongolia and this
project has the potential to provide a great example of a future solution for
using low cost, low quality domestic resources in China in a clean and
responsible manner," said Robert Rigdon, president and CEO of SES. "We believe
this cooperation is a win-win opportunity for both parties and we look forward
to finalizing the technical and commercial arrangements for the supply of our
technology, equipment and services and then to have the project quickly move
forward into the detailed engineering and construction phases. Because of our
technology's capability to cleanly process these lower quality coals in Inner
Mongolia, we have become the key for our customers like Hongye to achieve
lower operating costs, which enable positive operating margins from their
projects."

About Synthesis Energy Systems, Inc.

SES provides technology, equipment, engineering and technical 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 fluidized bed gasification technology, which SES licenses from the
Gas Technology Institute. The SES technology converts coal in a cost effective
manner into synthesis gas without many of the harmful emissions normally
associated with coal combustion plants. The primary advantages of the SES
gasification technology relative to other gasification technologies are (a)
greater fuel flexibility provided by the ability of SES to use most all
qualities of coal (including lower grade, 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, please visit www.synthesisenergy.com or
call (713) 579-0600.

About Hongye International Investment Group Co., Ltd.

The Group headquarters is located in the City of Wuhai, Inner Mongolia
Autonomous Region. Supported by local authorities and the rich natural
resources, the Group has been actively working on a research for efficient and
clean conversion of coal and a diversification of organic chemical raw
material source and has successfully organized its eight business lines
including coal mining, mining and processing, coal chemical industry, gas
heavy truck equipment manufacturing, ecological agriculture, ecological
pharmaceuticals, investment and financing, and culture industries. Guided by
state polices and a scientific point of view of development, the Group is
growing closely complying with 12th Five-year Plan for coal chemical industry
and the region's 8337 Project. By 2011, the Group has established 18 wholly
owned, holding and joint-stock enterprises, including 15 wholly owned and
holding, scattered around Shanghai, Beijing, Suzhou, Shandong Zaozhuang and
Lianyungang, Henan Yima, Inner Mongolia, American Santiago and Chicago. The
Group was also listed the China top 500 private enterprises and Inner Mongolia
top 100 in 2011, which laid a groundwork for large sized ethanediol and coal
chemical projects.

SES 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 development stage of the operations 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 including its China platform initiative, its ability to reduce
operating costs, the limited history and viability of its technology,
commodity prices and the availability and terms of financing opportunities,
its results of operations in foreign countries, its ability to diversify, the
ability of the ZZ joint venture to effectively operate XC's methanol plant and
produce methanol, its ability to obtain the necessary approvals and permits
for future projects, the estimated timetables for achieving mechanical
completion and commencing commercial operations for the Yima project as well
as the ability of the Yima project to produce revenues and earnings, the
sufficiency of internal controls and procedures, its ability to grow its
business and generate revenues and earnings as a result of its proposed China
and India platform initiatives, and its ability to develop its power business
unit and marketing arrangement with GE and its other business verticals, steel
and renewables. 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.

Website: http://www.synthesisenergy.com
Contact: Synthesis Energy Systems, Inc., Charles Costenbader, Chief Financial
Officer, (713) 579-0600, Charles.Costenbader@synthesisenergy.com; or MBS Value
Partners, LLC, Matthew D. Haines (Investors), Managing Director, (212)
710-9686, Matt.Haines@mbsvalue.com; or Feintuch Communications (Media), Emily
Simmons, Senior Managing Director, (212) 808-4904, SES@feintuchpr.com
 
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