Tessag and Syntroleum Update Sweetwater Gas to Liquids Project

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Tessag and Syntroleum Update Sweetwater Gas to Liquids Project

OKLAHOMA, TULSA, Jun. 25 -/E-Wire/-- Syntroleum Corporation (Nasdaq: SYNM) and Tessag INA issued a project update today that the recent design changes that have delayed finalization of the EPC (engineering/procurement and construction) contract for Syntroleum's Sweetwater gas-to-liquids project, under development in Australia, are now agreed.

"With the incorporation of these design changes, we can now finalize the remaining business issues and move toward the execution of the EPC contract,' said Bill Fortescue, senior vice president for Tessag. "We continue to be excited about the significance of the Sweetwater project and the momentum building for the emergence of a global GTL industry.'

"We continue to make progress toward finalization of the EPC contract,' stated Mark Agee, Syntroleum president and chief operating officer. "Although we are behind the original schedule, we believe that the resulting benefits will prove worth the delay and result in increased operational flexibility for the plant and an expanded product slate that is attuned to market needs. In parallel with our efforts to complete the EPC contract, we have also been working to put the complete financing package in place and look forward to getting this project into the construction phase as soon as possible.'

The EPC contract has been initialed by both companies and is in final stages of negotiation, pending completion of the documentation for its 28 appendices, of which 17 have already been fully documented and agreed to by both companies. Both parties are working to get the contract executed. Because of the complexity of the issues, however, the timing is difficult to predict with any certainty. Syntroleum and Tessag, therefore, will refrain from providing further timing estimates prior to the actual completion of the contract.

The Sweetwater project is a nominal 10,000 barrels per day plant that will employ the Syntroleum Process to convert natural gas into ultra-clean, high-performance, sulfur-free synthetic specialty products, such as lubricants, industrial fluids and paraffins, as well as synthetic transportation fuels. The plant is to be located on the Burrup Peninsula in Western Australia. Both Enron and Ivanhoe Energy have signed memorandums of understanding to respectively acquire 13 percent of the project.

Syntroleum Corporation is the developer of a proprietary technology for converting natural gas into synthetic liquid hydrocarbons. The company, in partnership with others, plans to build GTL plants using its technology in a number of global locations, Sweetwater being the first. Additionally, Syntroleum licenses its process to oil companies for the manufacture of fuels. Current licensees include ARCO (now BP), Enron, Ivanhoe Energy, Kerr-McGee, Marathon, Repsol-YPF, Texaco and the Commonwealth of Australia.

Tessag INA is a member of the RWE group of companies (Frankfurt, Germany: RWE), a multi-utility group with interests in power, water, gas, petroleum, waste management, plant engineering and construction.

This document includes forward-looking statements as well as historical information. These forward-looking statements include, but are not limited to, statements relating to the EPC contract with Tessag, the Syntroleum Process and related technologies, gas-to-liquids plants based on the Syntroleum Process, including the Sweetwater plant, anticipated costs to design, construct and operate these plants, anticipated costs to make products from these plants, the timing of commencement and completion of the design and construction of these plants, obtaining required financing for these plants, the economic construction and operation of gas-to-liquids plants, the value and markets for plant products, testing, certification, characteristics and use of plant products, the continued development of the Syntroleum Process (alone or with partners), anticipated capital expenditures, anticipated revenues, the sale of and costs associated with our real estate inventory and any other statements regarding future growth, cash needs, operations, business plans and financial results. When used in this document, the words "anticipate,' "believe,' "estimate,' "expect,' "intend,' "may,' "plan,' "project,' "should' and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these kinds of statements involve risks and uncertainties. Actual results may not be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the risks that the EPC contract with Tessag is not completed, the cost of designing, constructing and operating commercial-scale gas-to-liquids plants will exceed current estimates, the schedule for construction of commercial-scale gas-to-liquids plants will extend beyond current estimated schedules, financing for design and construction of commercial-scale gas-to-liquids plants and our other activities may not be available, commercial-scale gas-to-liquids plants will not achieve the same results as those demonstrated on a laboratory or pilot basis, gas-to-liquids plants may experience technological and mechanical problems, improvements to the Syntroleum Process currently under development may not be successful, markets for gas-to-liquids plant products may not develop, plant economics may be adversely impacted by operating conditions, including energy prices, construction risks and risks associated with investments and operations in foreign countries, our ability to implement corporate strategies, competition, intellectual property risks, our 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.

Syntroleum Corporation

http://www.syntroleum.com/index.htm

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