April 10 (Renewables Now) - US clean energy company Synthesis Energy Systems Inc (NASDAQ:SES) announced on Monday it plans to sell its SES Gasification Technology (SGT) to Australian Future Energy Pty Ltd (AFE).
SES said in a statement it has entered into a technology purchase option agreement with AFE that gives the two parties time until July 31, 2019 to complete the transaction. In this period, the buyer will have to arrange financing, while SES secures the necessary consents.
The terms of the deal call for AFE to take over Synthesis Energy Systems Technologies LLC, which owns the above-mentioned technology and all related global business undertakings. The Houston-based company, however, will retain all its ownership rights to the SGT technology business for China. Moreover, for a period of three years from the effective date of the transaction, SES will own the exclusive right to either hold or offer for sale the technology for use in India, Brazil and Poland.
The SGT is used for the production of low-to-medium heating value synthesis gas, also referred to as syngas, from various feedstocks including biomass and municipal solid waste (MSW). In addition, it is used for the production of high-purity hydrogen for cleaner transportation fuels.
“We have completed several years of technology commercialization efforts in China, building commercial projects which operate efficiently and reliably providing SGT syngas for methanol production and for industrial syngas. However, we have not been able to deliver adequate finance results from China to allow us to continue supporting the cost of SGT technology commercialization on our own,” commented SES’ president and CEO, Robert Rigdon.
In exchange for selling the technology, SES will receive one million fully paid shares in AFE upon signing of the deal, plus USD 5.8 million (EUR 5.1m) in cash, to be paid in tranches.
SES is already a shareholder in AFE, having a 36% ownership. The Australian firm’s focus is on the Gladstone energy and ammonia project, designed to produce some 700 tonnes per day of ammonia and about 11 petajoules of pipeline quality gas. Rigdon believes that the SGT technology can help cut the cost to build and operate such facilities.
(USD 1.0 = EUR 0.887)