The Two Parties Will Cooperate in Proving Syntroleum GTL
Technologies on a Commercial Industrial Scale, and upon Successful
Application, Will Jointly Market the Technologies within China
TULSA, Okla.--(BUSINESS WIRE)--Feb. 20, 2007--China Petroleum &
Chemical Corporation (Sinopec Corp.) and Syntroleum Corporation
(Syntroleum) have today announced their intention to cooperate.
Sinopec Corp. (NYSE: SNP) is an integrated energy and chemical
company, with its oil refining capacity ranking No. 4 in the world.
Syntroleum Corporation (NASDAQ: SYNM), located in Tulsa, Oklahoma, has
developed GTL technologies with unique features. The two parties have
signed a non-binding memorandum of understanding (MOU). This
establishes a joint technology development effort to advance natural
gas-to-liquids (GTL) and coal-to-liquids (CTL) technologies,
cooperation in verifying Syntroleum GTL technologies on an industrial
scale, construction of a 700,000 tonne per annum (17,000 barrel per
day) GTL plant and a 3,000 tonne per annum (100 barrel per day) CTL
pilot plant in China using Syntroleum's technologies, and jointly
marketing SSTC technology (Sinopec Syntroleum technology) in China
through the most effective means. The MOU calls on Syntroleum to
provide Sinopec with access to its complete set of proprietary GTL
technologies including catalyst technology and Fischer-Tropsch
technologies related to CTL for use in China on an exclusive basis
during the period of cooperation. After signing a formal cooperation
agreement, Sinopec agrees to provide Syntroleum with $20 million per
year over the next five years to support development of the
technology. Sinopec and Syntroleum have already commenced relevant
work on a legally binding cooperation agreement "Research and
Development Cooperation Agreement".
The MOU also calls on Sinopec to start feasibility studies for the
construction of a 700,000 tonne per annum GTL plant in China and a
3,000 tonne per annum CTL pilot plant, upon the completion of the
cooperation agreement. Both plants will be fully capitalized by
Sinopec, with technological support from Syntroleum. The two projects
will provide the basis for the two parties to jointly market the
combined FT technology capabilities to third parties within China.
This will give the parties a competitive position in providing
engineering and technological capabilities to the China market.
Syntroleum is jointly developing a 50,000 barrel per day GTL
project in Papua New Guinea (PNG) with Kuwait Foreign Petroleum
Exploration Corporation (KUFPEC). Following a joint Sinopec/
Syntroleum visit to PNG, Sinopec has expressed its wish to become the
main Engineering, Procurement and Construction contractor for this GTL
project. Syntroleum has expressed its firm desire to cooperate with
Sinopec in the project.
"We have conducted many years of research and testing on
Fischer-Tropsch technology. We are convinced that Syntroleum's slurry
column reactor technology is one of the most advanced in the world,"
said Mr. Cao Xianghong, Chief Engineer of Sinopec. "We believe that
Sinopec's Fischer-Tropsch expertise combined with that of Syntroleum,
will enable us to jointly provide world-class Fischer-Tropsch
solutions to the marketplace and help meet the growing demand for this
technology in China."
"Having a highly sophisticated refining and construction company
like Sinopec as a partner is a major advancement of Syntroleum's
business. Our FT technologies developed through extensive research are
suitable for different types of plants and enable us to meet the
requirements of Sinopec," said Jack Holmes, president and CEO of
Syntroleum. "The full-scale 700,000 tonne per annum GTL plant to be
constructed, along with the 3,000 tonne per annum CTL pilot plant will
place Syntroleum and Sinopec as leaders in the Fischer-Tropsch
industry in China. Together with Sinopec, we believe that our combined
technology will be successful in capturing market share in China."
About China Petroleum & Chemical Corporation (NYSE: SNP)
China Petroleum & Chemical Corporation ("Sinopec Corp.") is the
first company in China listed on the stock exchanges in Hong Kong, New
York, London and Shanghai, and is also an integrated energy and
chemical company with upstream, midstream and downstream operations.
The principal operations of the Company include: exploring for and
developing, producing and trading crude oil and natural gas;
processing crude oil, producing petroleum products and trading,
transporting, distributing and marketing petroleum products;
producing, distributing and trading petrochemical products.
About Syntroleum (NASDAQ: SYNM)
Syntroleum Corporation owns a proprietary process for converting
natural gas or synthesis gas derived from coal and other carbon-based
feedstock into synthetic liquid hydrocarbons. The company plans to use
its technology to develop and participate in natural gas and coal
monetization projects in a number of global locations.
This document includes forward-looking statements as well as
historical information. Forward-looking statements include, but are
not limited to, statements relating to the amount of GTL product,
possible production rates, fuel capabilities and characteristics,
negotiations with industry participants and governmental entities,
project costs, financing and timing, receipt and amount of project
revenues, marketing of Syntroleum's technologies, and the use and
effectiveness of the Syntroleum Process and related technologies and
products. When used in this document, the words "anticipate,"
"believe," "estimate," "expect," "intent," "may," "project," "plan,"
"should," "could," 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 failure to receive governmental
approvals, the failure to assign a participating interest to
Syntroleum and/or to an industry participant, failure of the wells to
produce as the previous test wells, 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), construction risks, 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
CONTACT: Syntroleum Corporation
Gary Gamino, 918-592-7900
ggamino@syntroleum.com
SOURCE: Syntroleum Corporation
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