TULSA, Okla., Aug 15, 2005 (BUSINESS WIRE) -- Syntroleum Corporation (Nasdaq:SYNM) announced that it
has signed a memorandum of agreement (MOA) with Australian-based Linc
Energy to pursue the development of a coal-to-liquids (CTL) project
using the Syntroleum(R) Process in Queensland, Australia.
The agreement, which integrates Syntroleum's unique air-based
Fischer-Tropsch (FT) technology with Linc Energy's underground coal
gasification (UCG) expertise, is part of Linc Energy's ongoing
Chinchilla Project which also includes early development of an
integrated a power plant.
The MOA sets the terms of cooperation on the Chinchilla Project
and future UCG-CTL projects will be pursued by Linc Energy under a CTL
license from Syntroleum with options for Syntroleum's equity
participation in these projects. Under the MOA, Linc Energy and
Syntroleum will jointly fund a series of technology demonstration
programs in advance of developing engineering designs for the CTL
"Linc Energy has effectively demonstrated its UCG process at the
Chinchilla facility for several years. Linc's underground gasification
process has the potential to significantly reduce the capital cost of
the CTL plants. They have produced commercial volumes of
nitrogen-diluted syngas which we believe have the characteristics
uniquely suitable for Syntroleum's air-based FT process," said Ken
Roberts, senior vice-president of business development at Syntroleum.
"We expect that Linc will continue to make rapid progress at their
Chinchilla site. As the demonstration of integrating our technology
with Linc's process occurs, Syntroleum is pleased to have the option
to join with Linc as an equity participant in the Chinchilla Project.
We are in a unique position to work with Linc to capitalize on vast
coal resources in Australia and other parts of the world."
The UCG process utilized at the Chinchilla facility is similar to
commercial techniques used in Russia for over 30 years. It involves
injecting air and steam into an underground coal seam through a series
of boreholes and igniting the coal in-situ. The coal seam is gasified
and hot product gas containing the key feedstock for power generation
or FT synthesis (hydrogen and carbon monoxide, or synthesis gas), is
produced via a second series of boreholes.
The UCG syngas, which undergoes sulfur removal and additional
conditioning at the surface, is similar to syngas obtained from
conventional surface coal gasification systems, but production is
achieved at a much lower cost. Underground sequestration of carbon
dioxide (CO2) is often an important component of commercial designs.
The coal-derived syngas is burned in gas turbines to produce power or
is used as feedstock for FT reactors and refining processes to make
ultra-clean diesel fuel.
The first commercial phase of the Chinchilla Project, which Linc
Energy plans for next year, involves installation of a 30-40 MW power
plant which will provide electricity to local markets. The second
commercial phase of the Chinchilla Project, which plans for a 17,000
barrel per day Syntroleum CTL plant and power plant expansion, will be
developed over the next several years.
Linc Energy currently holds over 4 billion tons of coal reserves
in Queensland, Australia and intends to develop multiple worldwide CTL
projects utilizing its proven UCG technology and expertise integrated
with the Syntroleum(R) Process.
"We are pleased to be working with Syntroleum on this emerging
UCG-CTL industry. The advancements they have made with the proven
technology at their Catoosa Demonstration Facility complement the
accomplishments we have made at our Chinchilla facility, setting the
stage for successful integration of our two technologies," said Peter
Bond, managing director of Linc Energy. "Demonstration of this concept
will provide a roadmap for converting Australia's vast coal reserves
into ultra-clean fuels."
Syntroleum Corporation (Nasdaq:SYNM) owns a proprietary GTL
process for converting natural gas as well as other materials like
coal and petroleum coke into liquid hydrocarbons. The company plans to
use its technology, as well as others, to develop and participate in
gas-to-liquids and coal-to-liquids projects in a number of global
locations. For more information about Syntroleum, visit
For more information about Linc Energy, visit
This document includes forward-looking statements as well as
historical information. Forward-looking statements include, but are
not limited to, statements relating to the impact of the energy bill
on Syntroleum and the coal-to-liquids industry, the testing,
certification, characteristics and use of synthetic fuels and
alternative fuels, the Syntroleum Process and related technologies and
products, GTL or coal-to-liquids plants using the Syntroleum Process,
government support for the construction and operation of such plants,
the economic use of such plants and the continued development of the
Syntroleum Process. When used in this document, the words
"anticipate," "believe," "estimate," "expect," "intent," "may,"
"project," "plan" "should," and similar expressions are intended to be
among the statements that identify forward-looking statements.
Although Syntroleum believes that its expectations reflected in these
forward-looking statements are reasonable, such statements involve
risks and uncertainties and no assurance can be given that actual
results will be consistent with these forward-looking statements.
Important factors that could cause actual results to differ from these
forward-looking statements include the potential that commercial-scale
GTL plants will not achieve the same results as those demonstrated on
a laboratory or pilot basis or that such plants will experience
technological and mechanical problems, the potential that improvements
to the Syntroleum Process currently under development may not be
successful, the impact on plant economics of operating conditions
(including energy prices and government support for such plants),
construction risks, risks associated with investments and operations
of GTL and coal-to-liquids plants, the ability to implement corporate
strategies, competition, intellectual property risks, Syntroleum's
ability to obtain financing and other risks described in the company's
filings with the Securities and Exchange Commission.
(R) "Syntroleum" is registered as a trademark and service mark in
the U.S. Patent and Trademark Office
SOURCE: Syntroleum Corporation
Syntroleum Corporation, Tulsa
Mel Scott, 918-592-7900