SOURCE: Synthesis Energy Systems

March 27, 2007 08:00 ET

SES, Hai Hua Joint Venture Completes Financing for Gasification Plant in China

HOUSTON, TX -- (MARKET WIRE) -- March 27, 2007 -- Synthesis Energy Systems, Inc. ("SES" or the "Company") (OTC: SYMX) announced that SES (Zaozhuang) New Gas Company, Ltd., its 95%-owned joint venture (the "Joint Venture") with Shandong Hai Hua Coal & Chemical Company Ltd. ("Hai Hua"), completed the funding of a loan for its first coal gasification facility currently under construction in Shandong Province, China (the "Project"). The loan of China Yuan Renminbi (RMB) 92 million (US$12 million) is being provided by the Industrial and Commercial Bank of China ("ICBC") and represents approximately one half of the Project's projected construction costs.

"This represents the first successful bank financing of a U-GAS® gasification facility in China, and evidences the strength of this project and its partners," explained Donald Bunnell, President and CEO of SES - Asia Pacific. "We are extremely pleased to have achieved this financial closing with ICBC which further validates the U-GAS® technology as a reliable and efficient alternative source of energy and chemical products to manufacturers worldwide."

"It's an important step forward for SES as it brings us closer to our strategic vision. We are pursuing similar investment opportunities in China, as well as in the United States, and plan to replicate our U-GAS® designed facility to meet our business partner's needs for clean and sustainable energy and chemical products," concluded Bunnell.

The Joint Venture was formed in August 2006 to construct, own and operate this Project, which will use SES' licensed U-GAS® technology to convert low cost waste coal to synthesis gas ("syngas"). Hai Hua will use the product syngas produced from the coal gasification facility as a feedstock for its newly constructed methanol plant, and as fuel in its coke ovens and for its internal power generation facility.

Construction is currently about 60 percent complete with start-up anticipated in the third quarter of this year. Upon successful start-up, the Company expects to begin commercial operations, which should be less than one year from the Project's initial ground breaking in December 2006. Future expansion plans would increase capacity up to 100,000 Ncum per hour and would accommodate Hai Hua's planned increase in methanol production and meet the gas demands of other Xuecheng industrial park tenants.

About Synthesis Energy Systems

Synthesis Energy Systems, Inc. is an energy and technology company that deploys proprietary systems and technology to gasify low value fuels to replace high cost energy and chemical products sold to major global markets. The U-GAS® technology, which the Company licenses from the Gas Technology Institute, is designed to turn waste coal products into high value synthesis gas for use in power and chemical applications. The technology performs this gasification without many of the harmful emissions normally associated with coal fired energy production. SES currently has offices in Houston, Texas, Shanghai and Beijing, China. For more information on SES, visit www.synthesisenergy.com or call (713) 579-0600.

Forward-Looking Statements

Except for historical information contained herein, the matters discussed in this press release contain 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 that involve substantial risks and uncertainties. When used in this press release and in any documents incorporated by reference herein, the words "expects," "will" and similar expressions identify certain of such forward-looking statements. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of SES and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond SES's control. These include, but are not limited to, risks and uncertainties associated with: our early stage of development, the limited history and viability of our technology and our results of operation in foreign countries. SES cautions that the foregoing factors are not exclusive. SES assumes no obligation to update the information contained in this press release.

Contact Information