SYNGAS - Clinton Project

Overview

The Clinton Project is located approximately 120 km northwest of Adelaide city, in South Australia, as shown in Figure 1 below. The Project involves the development, commissioning and operation of a large scale, long-term premium diesel production facility. Syngas is targeting bringing the Clinton Project online in 2015 and operating it for 40 years. The Project has the potential to generate significant returns for shareholders over this time frame in an increasing oil price context.

The Clinton Project's primary feed material is the Company's 100% controlled feedstock within Mineral Exploration License (MEL) 3896. This coal (lignite) feedstock is currently expected to be supplemented by non-food biomass sourced from the local area as part of the Company's carbon management strategy. Technically, the Clinton Project is what is called a Coal-Biomass-to-Liquid (CBTL) project.

Figure 1: Location of Mineral Exploration Licences held by Syngas Energy Limited

In April 2009, the Clinton Project Pre-Feasibility Study (PFS) was released setting out the targeted facility scale, products, by-products and technologies to be used. The PFS also set out the core production steps to be undertaken in the production of premium diesel. The PFS included estimated capital and operating costs for the Project. [Click here to access the ASX PFS announcement directly].

At current oil prices, of around US$65/bbl with operating costs of US$33/bbl, from production commencing in 2015, the PFS base case forecast a positive outlook for the Clinton Project.

Since the PFS was released, a number of improvements to the base case have been made, enhancing the Company's forecast position.

Syngas has now commenced work on the Clinton Project Bankable Feasibility Study (BFS). This work is expected to be completed within 2½ years. Subsequent to completion of the BFS, the Project construction phase is expected to commence.