June 5, 2007: TransGas Development Systems to Build One of the World's Largest and Cleanest Coal Gasification Facilities in Scriba, NY

TransGas Development Systems (TGDS) announced today that it will construct one of the world’s largest, and cleanest, coal gasification facilities in the Town of Scriba, just east of the City of Oswego.

During the development phase of the project, TGDS has been working in cooperation with the Novelis Corporation, Operation Oswego County and the Port Authority of Oswego.

The synthetic natural gas, or “SNG”, produced by the TGDS Oswego project would be available for use by manufacturers like Novelis, electric generation plants, home and commercial heating applications, automobile fueling or as an alternative to natural gas as an industrial process feedstock.

In addition, the SNG produced at TGDS in Oswego also will be transported via existing natural gas pipelines to provide a clean-burning fuel for the proposed 1,100 megawatt TransGasEnergy (TGE) cogeneration facility in Brooklyn, New York.

The approximately $2 billion TGDS Oswego project will begin the permitting and site approval process later this summer and could be under construction early next year.

When fully operational in late 2010, the TGDS plant will process up to an estimated 20,000 tons of coal per day. The coal will be brought to the plant via the CSX system in specially designed rail cars, which will be unloaded in a state-of-the-art coal handling facility operated under a slight vacuum to insure that no coal dust escapes.

TGDS is also working with the Port Authority of Oswego which could receive large shipments of coal by freighter.

In addition to creation of 150-plus full time TGDS positions, it is estimated that more than 1,500 workers will be employed during the Oswego project’s construction. The annual economic impact of TGDS throughout all sectors of the Upstate New York economy is expected to top $500 million.

“Novelis is pleased to be one of the first customers of the new TransGas facility,” said Buddy Stemple, Vice President and General Manager of Specialty Products for Novelis North America. “Synthetic natural gas provides an excellent alternative to the current supply of pipeline natural gas used in our aluminum manufacturing operations in Oswego. This provides a real opportunity to move toward the development of a more efficient, competitive and sustainable energy alternative, which ultimately improves the competitiveness of our business.”

L. Michael Treadwell, executive director of Operation Oswego County, noted that Oswego County has a long history as being “the electrical power generation capital of the Northeast.”

“Now the county is rapidly expanding into the renewable energy field with such projects as the Northeast Biofuels ethanol plant and the GS Fulton Biodiesel facility, both of which will be in operation later this year at the Riverview Business Park in Volney,” Treadwell continued.

“The TGDS project would complement this growing industry cluster, and at the same time create a synergistic relationship with Novelis, our county’s largest manufacturer,” Treadwell said.

“The availability of alternative, sustainable fuels will help to make Novelis an even more competitive global player in the aluminum industry. The low cost energy provided by the TGDS project also has great potential to supply and secure other manufacturing opportunities in Oswego County,” Treadwell added.

“The Port of Oswego Authority is proud to play a role in the ongoing economic development of our area. In particular, the Port is very pleased to be involved with such a progressive concept as the TransGas project,” said Dr. Richard Tesoriero, chairman of the Port Authority’s board of directors. “The TGDS project will provide an important source of energy which be will a major catalyst for industrial growth in our county and Upstate New York.”

Adam Victor, President of TGDS, explained that unlike most other traditional coal gasification technologies, the TGDS process will produce SNG fuel and not electricity, allowing optimum energy efficiencies for a variety of uses and locations.

“Because our gasification process does not use combustion, there are virtually no emissions,” Victor said.” In addition, the TGDS process collects 94 percent of carbon dioxide produced, prior to the production of SNG.”

Victor explained that the TGDS syngas can easily be transported via existing pipelines to power the proposed TGE co-generation facility in Brooklyn.

“Like our Oswego project, the Brooklyn power plant will be among the cleanest and most fuel efficient in the world,” Victor continued. “And in a world concerned about carbon emissions and climate change, it’s important to note that the Brooklyn plant can displace 3.2 million tons of carbon dioxide per year, the equivalent of the daily CO2 emissions of 500,000 automobiles.”

Victor said that by producing clean, transportable and price-certain SNG to fuel the TGE Brooklyn co-generation facility, the TGDS project also will help to off-set the need for construction of long overhead electric transmission lines, such as the controversial New York Regional Interconnect proposal to bring electricity from rural Upstate to New York City.

Victor said the TGDS project will also give preference to the hiring of local contractors, suppliers and professional services such as O’Brien & Gere which will serve as local project engineer.

“By efficiently and cleanly converting American coal into energy in a virtually emission free process, TGDS will help New York State to lead the way in our nation’s effort to achieve energy efficiency and independence,” Victor added. “And in doing so, we will create jobs and economic opportunity for the people of Oswego County and Upstate New York.

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