Plant Expected to Produce Gasoline and Methanol
PITTSBURGH and HOUSTON, July 28 /PRNewswire-FirstCall/ -- CONSOL Energy
Inc. ("CONSOL") (NYSE: CNX), the nation's largest producer of bituminous coal,
and Synthesis Energy Systems Inc. ("SES") (Nasdaq: SYMX), a global industrial
gasification company, intend to develop through a joint venture their first
U.S. coal gasification and liquefaction plant to be located in West Virginia.
CONSOL (through its subsidiary Terra Firma Company) and SES have formed
Northern Appalachia Fuel LLC ("NAF"), as the company through which the
development will occur.
The Board of Directors of CONSOL and SES have authorized funds for
development activities, including the front-end engineering design ("FEED")
package. Each member company will contribute equally to this phase of the
project. NAF is finalizing agreements with Aker Solutions US Inc., a
subsidiary of Aker Solutions ASA (OSL: AKSO), to perform the FEED. The FEED
will include a carbon management strategy that will focus on carbon
sequestration in a deep saline aquifer. At a later date, NAF will file for
environmental and other permits necessary for the construction of the plant.
CONSOL and SES propose to site the plant near Benwood, West Virginia,
south of Wheeling. It is expected that the plant will be a 'mine mouth'
facility with feedstock supplied directly from CONSOL's nearby Shoemaker
complex. The feedstock will be a blend of run of mine coal and coal otherwise
not recovered in the normal preparation process. Coal will be converted to
syngas utilizing SES's proprietary U-GAS(R) technology. It is expected that
the syngas will be used to produce approximately 720,000 metric tons per year
of methanol that can be used as a feedstock for the chemical industry. It is
also expected that the project will be capable of converting methanol
production to approximately 100 million gallons/year of 87 octane gasoline.
NAF is currently negotiating with ExxonMobil Research and Engineering to
license their proprietary methanol-to-gasoline technology. As envisioned, the
project will include a river terminal facility, where products will be stored
in tanks for off-loading into barges for ultimate delivery.
CONSOL and SES also have signed a memorandum of understanding ("MOU") with
the State of West Virginia and its partner, the Regional Economic Development
Partnership ("RED"), a private West Virginia non-profit development
corporation focused on generating business opportunities through job creation
and economic stimulus in the Ohio, Marshall and Wetzel counties of West
Virginia. Under the provisions of the MOU, the State and RED will provide
financing and tax incentives to the project over a 10-year period.
"This project has the potential to transform West Virginia from a major
coal producing state to a national energy center as well," said J. Brett
Harvey, CONSOL Energy President and Chief Executive Officer. "By converting
some of our region's abundant, high-Btu coal into gases and liquids, not only
will we create economic value for the state, but we will help West Virginia
become the linchpin of American energy security."
Harvey thanked both the State of West Virginia and the RED for their
assistance and support of the project. "In every conversation I have had with
Governor Manchin in recent years, we have talked about ways to leverage West
Virginia's coal position into a national energy leadership position -- a
position in which jobs, economic growth, and the enhancement of American
energy security flow from the harnessing of West Virginia's resources and the
'can-do' attitude of its people," Harvey said. "His vision is sound. With
West Virginia's help, our success with this plant will make the vision a
reality."
"We are proud of the progress we have made to-date toward the development
of the first industrial size U-GAS(R) gasification plant in the United States
and we appreciate the support that the State of West Virginia and the RED have
demonstrated for this initiative," said Tim Vail, President and Chief
Executive Officer of SES. "Together with our partner, CONSOL Energy, SES will
be taking a first step toward securing energy independence in the U.S. as we
convert raw and residual coal from CONSOL's Shoemaker mine and plant into
gasoline in an environmentally responsible and cost efficient manner," Vail
added.
"It's clearer than ever that one of the biggest issues our state and
country faces is meeting our energy needs," said West Virginia Gov. Joe
Manchin. "Technological solutions like this plant at Benwood will lead to more
environmentally friendly ways to use our coal and hold the key to America's
energy security. I am committed to making West Virginia the leader in clean
coal technology and the construction of clean coal power and fuel liquefaction
plants. We have the resources and expertise to realize our goal."
Both of West Virginia's United States Senators voiced their support as
well. "America cannot meet its energy needs," said Senator Robert C. Byrd.
"West Virginia has the coal, the brains, and the determination to meet that
challenge and demonstrate to the world that we intend to be part of the
solution."
Senator Jay Rockefeller also added his support. "We are in the midst of a
serious energy crisis in America. Today, with this project and others in the
works, West Virginia is announcing to the world that we're not waiting around
anymore," Rockefeller said. "We're getting started with a CTL plant that will
create jobs, meet modern environmental standards, and develop our most
abundant domestic resource - coal. This plant will help put our state on the
path to energy security and greater economic growth."
About CONSOL Energy:
CONSOL Energy Inc., a high-Btu bituminous coal and coal bed methane
company, is a member of the Standard & Poor's 500 equity index and has annual
revenues of $3.8 billion. It has 17 bituminous coal mining complexes in six
states and reports proven and probable coal reserves of 4.5 billion tons. In
addition, the company is a majority shareholder in one of the largest U.S.
producers of coalbed methane gas, CNX Gas Corporation. CONSOL Energy was
named one of America's most admired companies in 2005 by Fortune magazine. It
received the U.S. Department of the Interior's Office of Surface Mining
National Award for Excellence in Surface Mining for the company's innovative
reclamation practices in 2002, 2003 and 2004. In 2002, the company received a
U.S. Environmental Protection Agency Climate Protection Award.
About Synthesis Energy Systems, Inc.:
SES is an energy and technology company that builds, owns and operates
coal gasification plants that utilize its proprietary U-GAS(R) fluidized bed
gasification technology to convert low rank coal and coal wastes into higher
value energy products, such as transportation fuel and ammonia. The U-GAS(R)
technology, which SES licenses from the Gas Technology Institute, gasifies
coal without many of the harmful emissions normally associated with coal
combustion plants. The primary advantages of U-GAS(R) relative to other
gasification technologies are (a) greater fuel flexibility provided by our
ability 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) our ability to operate
efficiently on a smaller scale, which enables us to construct 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 Statement - CONSOL Energy
Various statements in this document, including those that express a
belief, expectation, or intention, as well as those that are not statements of
historical fact, are forward-looking statements (as defined in Section 21E of
the Securities Exchange Act of 1934 and the Private Securities Litigation
Reform Act of 1995). The forward-looking statements may include projections
and estimates concerning the timing and success of specific projects, our
future production, revenues, income and capital spending. When we use the
words "believe," "intend," "expect," "may," "should," "anticipate," "could,"
"would," "will," "estimate," "plan," "predict," "project," or their negatives,
or other similar expressions, the statements which include those words are
usually forward-looking statements. When we describe strategy that involves
risks or uncertainties, we are making forward-looking statements. The forward-
looking statements in this document speak only as of the date of this
document; we disclaim any obligation to update these statements unless
required by securities law, and we caution you not to rely on them unduly. We
have based these forward-looking statements on our current expectations and
assumptions about future events. While our management considers these
expectations and assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other risks,
contingencies and uncertainties, most of which are difficult to predict and
many of which are beyond our control. These risks, uncertainties and
contingencies include, but are not limited to: reliance on customers extending
existing contracts or entering into new long-term contracts for coal; reliance
on major customers; our inability to collect payments from customers if their
creditworthiness declines; the disruption of rail, barge and other systems
that deliver our coal, or pipeline systems which deliver our gas; a loss of
our competitive position because of the competitive nature of the coal
industry and the gas industry, or a loss of our competitive position because
of overcapacity in these industries impairing our profitability; our inability
to hire qualified people to meet replacement or expansion needs; coal users
switching to other fuels in order to comply with various environmental
standards related to coal combustion; the inability to produce a sufficient
amount of coal to fulfill our customers' requirements which could result in
our customers initiating claims against us; the risks inherent in coal mining
being subject to unexpected disruptions, including geological conditions,
equipment failure, timing of completion of significant construction or repair
of equipment, fires, accidents and weather conditions which could cause our
results to deteriorate; increases in the price of commodities used in our
mining operations and could impact our cost of production; obtaining
governmental permits and approvals for our operations; the effects of
government regulation; the effects of stringent federal and state safety
regulations; the effects of mine closing, reclamation and certain other
liabilities; uncertainties in estimating our economically recoverable coal and
gas reserves; we do not insure against all potential operating risks; the
outcomes of various legal proceedings, which proceedings are more fully
described in our reports filed under the Securities Exchange Act of 1934;
increased exposure to employee related long-term liabilities; our
participation in multi-employer pension plans may expose us to obligations
beyond the obligation to our employees; lump sum payments made to retiring
salaried employees pursuant to our defined benefit pension plan; our ability
to comply with laws or regulations requiring that we obtain surety bonds for
workers' compensation and other statutory requirements; acquisitions that we
recently have made or may make in the future including the accuracy of our
assessment of the acquired businesses and their risks, achieving any
anticipated synergies, integrating the acquisitions and unanticipated changes
that could affect assumptions we may have made; the anti-takeover effects of
our rights plan could prevent a change of control; risks in exploring for and
producing gas; new gas development projects and exploration for gas in areas
where we have little or no proven gas reserves; the availability of field
services, equipment and personnel for drilling and producing gas; replacing
our natural gas reserves which if not replaced will cause our gas reserves and
gas production to decline; costs associated with perfecting title for gas
rights in some of our properties; we need to use unproven technologies to
extract coalbed methane on some of our properties; location of a vast majority
of our gas producing properties in three counties in southwestern Virginia,
making us vulnerable to risks associated with having our gas production
concentrated in one area; other persons could have ownership rights in our
advanced gas extraction techniques which could force us to cease using those
techniques or pay royalties; the coalbeds from which we produce methane gas
frequently contain water that may hamper production; and other factors
discussed in our 2007 Form 10-K under "Risk Factors," as updated by any
subsequent Form 10-Qs, which are on file at the Securities and Exchange
Commission.
Forward Looking Statements - SES
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 facts, included in this press release that
address activities, events or developments that SES expects or anticipates
will or may occur in the future, including such things as future capital
expenditures (including the amount and nature thereof), business strategy and
measures to implement strategy, competitive strength, goals, expansions and
growth of the Company's business and operations, plans expansion and growth of
the project, quantity of methanol production, references to future success,
reference to intentions as to future matters and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by SES in light of its experience and its perception of
historical trends, current conditions and expected future developments as well
as other factors it believes are appropriate in the circumstances. 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 project's early stage of
development, estimates of resources needed to fund the project, successful
completion of the FEED, availability of financing and tax incentives and the
ability to successfully license methanol-to-gasoline technology. 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. SES has
no intention, and disclaim any obligation, to update or revise any forward-
looking statements, whether as a result of new information, future results or
otherwise.
SOURCE Synthesis Energy Systems Inc.
-0- 07/28/2008
/CONTACT: Thomas F. Hoffman, CONSOL Energy Inc., +1-412-831-4060; or Ann
Tanabe, Synthesis Energy Systems, Inc., +1-713-579-0600/
/Web site: http://www.synthesisenergy.com /
(CNX SYMX)
CO: Synthesis Energy Systems Inc.; SES; CONSOL Energy Inc.; Northern
Appalachia Fuel LLC; NAF; Aker Solutions ASA
ST: Pennsylvania, Texas, Virginia
IN: OIL
SU: JVN
CB-JA
-- AQM033A --
9728 07/28/2008 08:00 EDT http://www.prnewswire.com
