Synthesis Energy Systems a small Houston, US company holds an important license for transforming technology that can turn cheap coal into syngas (synthetic natural gas).

The technology comes at a crucial time with the future of energy uncertain. The recent explosions in Fukushima, Japan have undermined worldwide confidence in nuclear power with Germany halting production at seven power plants and the Swiss suspending plans for any new nuclear power stations. When you also consider the Libyan oil crisis and rocketing oil prices (crude oil is now over USD 100 per barrel), this technology couldn’t have come at a better time.

China is so impressed by this technology that Synthesis Energy Systems is to see an investment of USD 83.5 million by China Energy. ZJX/China Energy could increase its equity stake to 60% assuming they make “best efforts” to complete a significant transaction and if the stock trades at USD 8.00 or greater for 20 consecutive trading days following the closing of the transaction, which is subject to shareholder approval

Radioactive particles have been detected in China following the Fukushima explosions, which might have something to do with China’s investment in alternative energy sources to nuclear power. Synthesis Energy Systems already has a plant in China producing syngas.

Synthesis Energy Systems holds a ten year license for the technology along with an exclusivity deal that can be renewed. Robert Rigdon, CEO, has stated that they specialise in providing ‘products and solutions to the energy and chemicals industries’ and intend to continue to ‘unlock the potential in challenging, low quality coals in an environmentally friendly manner.’ Synthesis Energy Systems will increase their board from seven to eleven directors following this major investment from China Energy.