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Press Release

Xebec Receives Minimum Purchase Commitment for CDN$ 51 Million
- Part of a three-year exclusive partnership with Sapio-

Release date: 16.05.2018

Press Release PDF

MONTREAL, (QC), May 16, 2018 – Xebec Adsorption Inc. (TSXV: XBC) (“Xebec”), a global provider of gas purification solutions for the industrial, energy and renewables marketplace, announced that it signed an exclusive Market Development and Commercialization Agreement with Sapio Group. Under this Agreement, Sapio is entering into a minimum purchase order commitment for multiple Xebec biogas upgrading plants for a total value of Euro 33 million (CDN$ 51 million) to be delivered over three years. (See related link below for the Press Release dated Feb 15, 2018).

Sapio Group is the largest industrial gas company in Italy with over 1,800 employees and revenues of Euro 500+ million. Its business model includes the production and distribution of bio-liquefied natural gas (bio-LNG) throughout Italy. After an extensive supplier evaluation process, Sapio chose Xebec as its biogas upgrading partner for bio-LNG facilities to be built by Sapio. The expectation of both parties is that 30 to 40 bio-LNG facilities will be built over the next 3 to 5 years. Xebec will provide the biogas upgrading units, including a CO2 reduction module, that will lower the CO2 content in the product gas down to 50 ppm (parts per million), allowing for on-site liquefaction of the renewable natural gas (RNG) and conversion into bioLNG.

Italy could soon emerge as the largest biogas upgrading market in the world

The Italian Government recently identified the transportation sector as a primary end user for renewable natural gas (RNG) in the form of bio-CNG and bio-LNG. On March 1, 2018, the European Commission under EU State aid rules approved an Italian support scheme for the production and distribution of advanced biofuels, including advanced biomethane, in the amount of Euro 4.7 billion (CDN$7.4 billion).

On March 2, 2018, the day after the EU cleared the program, Italy's Economic Development Ministry (MISE) signed two new energy decrees which include measures to aid large gas consumers as well as incentives for biomethane in transport for the Euro 4.7 billion (CDN$7.4 billion) previously approved.

By March 15, 2018, Italy’s Gas Operator, Snam, had received more than 500 requests from potential biomethane producers to connect their upcoming biomethane production sites to the existing gas grid, indicating a market size for biogas upgrading equipment in excess of CDN$ 1.5 billion over the next 3 to 5 years.

“We are very excited about our opportunities in Italy. According to the information available to us, we believe that Italy will emerge as the largest biogas upgrading market in the world over the next 3 to 5 years. We have an outstanding partner in Sapio who will work diligently on broadening their own bio-LNG projects and, along with our collaboration to commercialize Xebec’s biogas upgrading systems to third parties, we expect to gain significant market share overall. This strategic alliance with Sapio could allow us to become one of the market leaders for biogas upgrading in Italy.”
- Kurt Sorschak, President, Xebec Adsorption Inc.

Related links:
Watch the YouTube video to see the largest Xebec system in France on display:
https://youtu.be/UHWuq0Wrp9g

http://europa.eu/rapid/press-release_IP-18-1441_en.htm

http://www.xebecinc.com/investor-press-releases-details.php?id=290

https://www.platts.com/latest-news/agriculture/barcelona/italy-passes-biomethane-large-gas-user-decrees-26902859

https://www.platts.com/latest-news/natural-gas/barcelona/italys-snam-to-invest-eur52-billion-through-202126908724

For more information:

Xebec Adsorption Inc.
Sandi Murphy, Director, Investor Relations and Communications
+1 450.979.8718 smurphy@xebecinc.com

About Xebec Adsorption Inc.
Xebec Adsorption Inc. is a global provider of gas generation, purification and filtration solutions for the industrial, energy and renewables marketplace. Its customers range from small to multi-national corporations and governments looking to reduce their carbon footprints. Headquartered in Montreal (QC), Xebec designs, engineers and manufactures innovative and transformative products, and has more than 1,500 customers worldwide. With two manufacturing facilities in Montreal and Shanghai, as well as a sales and distribution network in North America, Europe, and Asia, Xebec trades on the TSX Venture Exchange under the symbol XBC. For additional information on the company, its products and services, visit Xebec at xebecinc.com.

About Sapio
SAPIO - Produzione Idrogeno Ossigeno produces and supplies industrial gases, and provides integrated services for customers in Italy and internationally. Its products include oxygen, hydrogen, nitrogen, and other gases that have applications in the fields of food, environment and energy, biotechnology, chemical-pharmaceutical, electronic, mechanical-metallurgical, health, glass and cement. SAPIO was founded in 1922 and has its headquarters in Monza, Italy, developing activities in France, Germany, Turkey and Slovenia. For additional information on the company, its products and services, visit www.sapio.it

Cautionary Statement
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Certain statements in this press release may constitute "forward-looking" statements within the meaning of applicable securities laws. This forward looking information includes, but is not limited to, the expectations and/or claims of management of Xebec with respect to information regarding the business, operations and financial condition of Xebec. Forward-looking information contained in this press release involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xebec or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This list is not exhaustive of the factors that may affect forward-looking information contained in this press release. When used in this press release, such statements use such words as "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "will" and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements.