SOURCE: Energy Quest, Inc.

March 03, 2008 10:00 ET

Energy Quest Signs Letter of Intent With Etanol del Pacifico Sur S.A.

Companies Intend to Construct an 82 Thousand Liter per Day Waste Biomass Gasification Synthetic Diesel Plant

HENDERSON, NV--(Marketwire - March 3, 2008) - Energy Quest, Inc. ("EQI") (OTCBB: EQST), an emerging leader in alternative energy and the development and production of hydrogen-enriched alternative fuels in an environmentally responsible manner, today announced the signing of a Letter of Intent (LOI) with Etanol del Pacifico Sur S.A. (EPSSA). The letter sets forth the basic terms and conditions under which EQI expects to enter into a joint venture with for the construction of an 82,000 liter per day waste biomass gasification synthetic diesel plant in Las Cabras, Chile.

EQI will provide the proprietary technologies and equipment for the complete gasification synthetic diesel plant, while EPSSA will provide the feedstock of waste biomass from their existing corn growing operations. EQI and EPSSA anticipate achieving engineering and commercial breakthroughs enabling the gasification of agricultural waste biomass for the profitable production of alternative green energy. The company plans to rapidly move forward subject to the mutual agreement of the terms and conditions set forth in the project proposal in addition to the completion of a joint venture agreement.

The basic terms of the proposed project agreement call for the establishment of a joint venture with EPSSA, whereby they would contribute proportionally resulting in ownership of 40% EPSSA and 60% EQI. EPSSA will contribute the waste biomass feed stock; EQI will provide patents, intellectual properties, equipment, management and financing. The equity of the proposed plant when complete is expected to be $32,000,000 USD. Following commissioning & start up, expected to be completed within 12 months from the signing of the joint venture agreement, the joint venture anticipates immediate cash flows with gross annual revenues of $16.6 million while yielding a net profit of $7.1 million after taxes and debt payment.

"We are excited about working with Energy Quest and completing our joint venture of the proposed gasification synthetic diesel plant. We welcome the opportunity to be a meaningful participant in this industry," stated Francisco Armijo, CEO of Etanol del Pacifico Sur S.A.

"The implementation of this technological innovation in the country will surely mark a milestone for the development of ecological fuels in the whole region. We believe this will not only allow an important reduction in global warming emissions, but specially in the case of Chile, it should serve to ease it strong dependency on imported oil," stated Jaime Eidelstein, South America Representative for Energy Quest, Inc. "We are pleased to have secured this opportunity with EPSSA. This project will be the first EQI installation of its gasification synthetic diesel system in South America," stated Wilf Ouellette, President and CEO of Energy Quest, Inc. "We expect this venture to pave the way for additional mutually beneficial opportunities in South America."


Etanol del Pacífico Sur S.A., a corn farmers association, was formed in 2006 by 150 mid-sized farmers with a total of 8,000 hectares under corn production in Las Cabras, just south of Santiago, Chile. They also aim to build a US$25 million corn to ethanol plant that will produce 40-50 million liters of bio-ethanol a year.

About Energy Quest

Energy Quest is a diversified energy company with interests in both conventional and renewable energy sources. Its mission is to bring new technologies to bear to enhance existing energy production as well as developing new energy sources. The immediate objective of the company is to secure energy projects using the PyStR and M2 gasifier and the acquisition of existing, profitable Alternate Energy companies. This would provide significant positive cash flow to the company while being an ideal location for development, demonstration, and operation of many of the company's new technologies. This is the first of many new technologies Energy Quest plans to announce and deploy over the coming months that will demonstrate that it is possible for an energy company to be both environmentally friendly and highly profitable.

Energy Quest through its subsidiaries, Syngas International Corp. and Syngas Energy Corp., is an emerging leader in the development and marketing of low-cost alternate fuels worldwide. Through superior technology, the Company is focused on becoming a GreenPowerhouse™. Record energy prices combined with the global focus moving rapidly towards addressing pollution, has heightened the need for sustainable, zero emission energy.. Energy Quest's technology is based on clean renewable energy positioning it to benefit from global trends.

Forward-Looking Statements

From time to time, the company may issue forward-looking statements, which involve risks and uncertainties. This statement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as actual results could differ and any forward-looking statements should be considered accordingly.

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