Syntroleum and Sustec Announce Coal-to-Liquids Joint Venture

Syntroleum Corporation (Nasdaq:SYNM) and Sustec AG, a private company based in Basel, Switzerland, announced today that they have entered into a Memorandum of Understanding that provides for exclusive joint business development of projects that will integrate Sustec's FUTURE ENERGY GSP(R) gasification technology with Syntroleum's Fischer-Tropsch (FT) and Synfining(R) technology.

The joint venture is aimed at converting coal and other carbonaceous materials such as petroleum-coke, residual fuel oil and biomass into ultra-clean fuels. Each company will own 50 percent of the joint venture.

Under terms of the joint venture, Syntroleum and Sustec intend to commit exclusive licensing agreements to their respective technologies to a separate business unit that will develop jointly-owned coal-to-liquids (CTL) production facilities and other non natural gas-to-liquids projects world-wide. This business unit will be the sole vehicle of both companies for developing and licensing projects utilizing integration of gasification with Fischer- Tropsch (IGFT) technologies from both companies. Syntroleum and Sustec also intend to pursue joint technology development under the new venture.

"This joint venture with Sustec is a very significant strategic development for Syntroleum and a major step in developing an expanded market for Syntroleum's FT and Synfining(R) processes, especially in the United States where significant undeveloped coal reserves can be converted into ultra-clean fuels," said Jack Holmes,
president and CEO of Syntroleum. "We have long considered Sustec as the state-of-the-art leader in gasification technology. We believe this combination can now offer a truly unique and very compelling technology value proposition to the coal industry."

Holmes went on to say, "Integration of coal gasification and FT technologies is increasingly being sought after in the United States, China, Australia and elsewhere. This joint venture presents a rare opportunity for companies pursuing investments in this important energy industry segment to access the complete technology package
required to develop coal energy in an environmentally-friendly way."

Dietmar Friess, Sustec AG president and CEO and chairman of Future Energy said, "We expect that this joint venture will significantly expand the opportunities for both of our companies. The projects that Sustec has in China, North America and Europe, and those that Syntroleum has been pursuing in the U.S. and Australia, will now be more attractive to all parties involved. Sustec-Group facilities in Germany and Syntroleum's facilities in the U.S. present a unique platform for our companies to integrate and advance our respective technologies."

Friess added, "Syntroleum has proven market-ready technology with a strong foundation to produce and deliver ultra-clean fuels. Adding an FT component to our gasification technology provides a large market opportunity for us."

Sustec's proprietary FUTURE ENERGY GSP(R) gasification technology converts a wide range of carbonaceous substances into synthesis gas (H2 and CO) which can then be converted into ultra-clean transportation fuels and other specialty chemicals utilizing Syntroleum's technology.

Syntroleum has operated an FT pilot plant in Tulsa, Oklahoma, since the early 1990s and has been operating its 70-barrel per day Catoosa FT demonstration facility since 2004 under a program sponsored by the U.S. Department of Energy.

Sustec's first commercial gasifier (200 MW thermal equivalents) went into operation in 1984 at Schwarze Pumpe, Germany and is currently operating at this industrial complex owned since 2005 by Sustec Industries AG. In Freiberg, Germany, FUTURE ENERGY GmbH, the R & D and engineering center of the Sustec-Group, has operated its current state-of-the-art entrained flow gasification demonstration plants, 3 MW and 5 MW thermal equivalents, since 1979 and 1996 respectively.

The Freiberg center of excellence and testing facility was part of
the former Deutsches Brennstoffinstitut Freiberg, where the GSP entrained flow gasification technology was originally developed prior to the acquisition of all intellectual property rights and unprotected know-how by the Sustec Group of companies.

Syntroleum Corporation owns a proprietary FT process for converting natural gas or synthesis gas derived from coal 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. Syntroleum and its current licensees will continue to pursue gas-to-liquids projects separately from this venture. Syntroleum and Sustec will commence negotiation on definitive documents for the establishment of the joint venture.