Synthesis Energy Systems Announces Start of Methanol Sales from its ZZ Joint Venture

 Synthesis Energy Systems Announces Start of Methanol Sales from its ZZ Joint

Handover of Xuecheng Energy's Methanol Plant to the SES ZZ Joint Venture

PR Newswire

HOUSTON, Nov. 4, 2013

HOUSTON, Nov. 4, 2013 /PRNewswire/ --Synthesis Energy Systems, Inc. (NASDAQ:
SYMX) ("SES") announced today that the handover of the Xuecheng Energy (XE)
Methanol Plant to its Zao Zhuang New Gas Co. Joint Venture (ZZ JV) has been
completed, giving the ZZ JV control of XE's adjacent methanol production plant
and methanol product sales.


On October 31, 2013, the ZZ JV and XE completed all of the required conditions
for the July 24, 2013, Cooperation Agreement (the "Agreement") with Xuecheng
Energy (XE) to become fully effective. Pursuant to the terms of the Agreement,
control of methanol operations, inventory, personnel, product sales and
accounting has been transferred to the ZZ JV. The ZZ JV's methanol operation
is currently producing refined methanol at a rate of approximately 160 metric
tons per day utilizing coke oven gas ("COG") purchased from XE. The refined
methanol product is being sold to existing local customers at market prices,
currently approximately 2,700 RMB per metric ton. SES will be consolidating
the financial results from the ZZ JV methanol operation and sales effective
November 1, 2013.

The ZZ JV's methanol operation is capable of producing methanol from either
COG alone or from a combination of COG and syngas produced from the two SES
gasification systems at the ZZ JV. The operation has a normal methanol
capacity of 45,000 metric tons per year using only COG and a capacity of
90,000 metric tons per year using COG and syngas combined. While the
production of methanol from COG is continuing, the ZZ JV is finalizing its
preparation work for the restart of its syngas operation. The ZZ JV
anticipates achieving syngas production during December 2013 after which the
methanol production could increase accordingly up to full capacity of 90,000
metric tons per year.

Robert Rigdon, President and CEO of SES, stated, "We are appreciative of the
diligence and perseverance of General Manager, Donald Huang, and his ZZ team
to achieve this win-win solution with Xuecheng Energy. I was pleased to be
present at the ZZ JV last week as we completed the handover from Xuecheng and
accomplished this important milestone for the Company. This achievement marks
a final resolution of the contractual dispute we had with the previous owners
of the Xuecheng methanol plant. It also marks an important new beginning for
our ZZ JV because we are now producing and selling higher value methanol
product. In December, we expect to restart our gasifiers and further increase
total methanol production," Mr. Rigdon added. "We are currently experiencing
favorable commodity price spreads between methanol and the coal feedstock for
our gasifiers. Based on the recent average methanol prices, we believe that
once we are at full methanol production rates we can generate $30 million or
more in annual methanol sales from the ZZ JV plant." 

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 or
call (713) 579-0600.

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 XE'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.

Contact: Synthesis Energy Systems, Inc., Charles Costenbader, Chief Financial
Officer, (713) 579-0600,, or MBS Value
Partners, LLC (Investors), Matthew D. Haines, Managing Director, (212)
710-9686,, or Feintuch Communications (Media), Emily
Simmons, Senior Account Executive, (212) 808-4904,
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