announcement

LNG ENGINE DEVELOPMENT FOR AUSTRALIA
Advanced Engine Components Limited (“ACE”) has commenced a development
and promotion strategy for Isuzu trucks, fuelled by liquefied natural gas (“LNG”), for
the Australian market.
This initiative will benefit significantly from the new LNG capacity and infrastructure
becoming available in Western Australia. The first LNG refueling station, for the heavy
duty vehicle market, is planned to be operational in Perth, Western Australia by the
last quarter of calendar 2007. ACE understands this site to be the first of a planned
refueling infrastructure, for heavy duty vehicles, throughout WA and into the Eastern
States.
ACE has developed, commissioned and tested 190hp, 200hp and 250hp
compressed natural gas (“CNG”) versions of the 7.8 litre Isuzu engine. The first of the
ACE/Isuzu CNG production vehicles has traveled more than 65,000 kilometers in
active service. As a result, development of LNG versions of these engines will be
completed relatively quickly.
In the next stage, ACE plans to develop LNG versions of the Isuzu, euro 4, 275hp and
425hp engines. LNG versions of these engines should be available to the market by
early 2008.
The ACE Natural Gas Vehicle System (NGVS) has already been developed for
operation on LNG powered engines. These LNG engines were developed under
existing contracts with Weichai Peterson Gas Engine Company (“Weichai”) and Wuxi
Xilian Diesel Limited Company (“Xilian”) in China. The Weichai/ACE LNG engine is
currently being trialed in trucks for the Shaanxi Province and the Xilian/ACE LNG
engine is being trialed in trucks for the Beijing Olympics.
These initiatives provide a significant opportunity for ACE to be a leading
entity in the NG engine market, for heavy duty vehicles, in Australia within 5
years.