Synthesis Energy Systems and YIMA Coal Industry Group Co. Ltd. Hold Groundbreaking Ceremony for New Coal Gasification to Chemicals Plant in Henan Province, China

December 19, 2008

HOUSTON, Dec. 19 /PRNewswire-FirstCall/ — Synthesis Energy Systems, Inc.
(“SES”) (Nasdaq: SYMX), a global industrial gasification company, announced
the groundbreaking ceremony for the first phase of its previously announced 1
million tonne per year coal to chemical plant (the “Plant”) which is being
developed with its joint venture partner, YIMA Coal Industry Group Co. Ltd
(“YIMA”). The ceremony took place today at the Plant site in Yima City, Henan
, China. Executives from SES and YIMA, as well as top level
provincial and local governmental officials including Henan’s vice governor,
head of the provincial land bureau, head of the provincial environmental
bureau, local presidents of China’s leading banks, and other dignitaries
participated in today’s ceremony along with over 1,000 other attendees from
the community. Once complete, the Plant will feed downstream process for the
production of transportation fuels and chemical intermediates. This
announcement follows SES’ successful test run of the YIMA coal in the SES
U-GAS(R) system at SES’ Zao Zhuang gasification plant in November.

Additionally, SES announced that it has received a loan commitment letter
from the Yima City branch of the Industrial and Commercial Bank of China which
loans will represent 50% of the capital costs of the project. The final terms
and conditions of the loan will be determined by the bank.

At the ceremony, Lorenzo Lamadrid, Chairman of Synthesis Energy Systems,
highlighted the strategic value of this project in the development of central
China’s coal to chemicals industry as part of the region’s long term goal of
providing clean energy and investing in leading technology to achieve that
goal. He also commented, “Together with our partner YIMA, we are committed to
building a world-class gasification plant that will convert low quality, low
cost coals into high value transportation fuels and chemical products.”

YIMA’s chairman Mr. Wu Luyu commented, “After the successful test of
YIMA’s high-ash coal at SES’ Zao Zhuang plant, we are excited to move this
project forward both because of the great near term opportunity it presents to
our company and to the Henan Province but also because of the long term growth
potential of our cooperation with SES both here and in other strategic
locations in China. The U-GAS (R) technology is ideally suited for the clean
and efficient conversion of the type of coal abundant here in Henan and
elsewhere in China, and we look forward to expanding our cooperation on more
such projects with SES.”

The Plant will utilize SES’ licensed U-GAS(R) technology to convert low-
quality, high-ash sub-bituminous coal into syngas and downstream products that
will help supply the region’s growing needs for transportation fuels and
chemical intermediates. The Plant will be constructed in a phased approach
that takes advantage of the U-GAS(R) technology’s ability to economically
scale the build-out of capacity. SES will own a 49% interest in the joint
venture and YIMA will own a 51% interest.

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-

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 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 business strategy
and measures to implement strategy, competitive strength, goals, expansion and
growth of the business and operations, plant expansion and growth of the
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 costs to complete the project, receipt of final government
approvals, availability of bank financing and the ability to successfully
expand the project in the future. 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.

Source: newswire

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