Thermal Energy Enters into Agreement with North Eastern US Paper Mill to Deliver Green Energy Supply Deal Valued Over $20 Million



    First phase of multi-mill initiative anticipated to offset the use of
    fuel oil by more than 105,000 barrels annually.

    OTTAWA, June 3 /CNW Telbec/ - Thermal Energy International Inc,
(TSX-V:TMG) (www.thermalenergy.com) is pleased to announce it has entered into
an agreement with a major North American integrated paper company for the
development and delivery of a green energy supply program worth in excess of
$20 million, using recovered waste heat at one of its facilities in the North
Eastern United States.
    This represents the first phase of a multi-site agreement involving the
deployment of Thermal Energy's heat recovery technologies across five sites.
    The initial project is expected to be delivered using the THERMAL AUD(TM)
(Alternate Utility Delivery) financing mechanism, where Thermal Energy
installs the technology and acts as the owner and operator of the system,
receiving regular fixed payments over the life of the contract, with a
purchase or renewal option at the end of the contract term. Thermal Energy
will also be proposing an alternate up-front capital purchase option upon
completion of the detailed engineering phase which is expected to be completed
over the next 30 days.
    This proposed project, Thermal's largest to date, would use multiple
FLU-ACE(R) heat recovery systems to capture waste heat produced by the mill
and incorporate it into operations to offset the use of fossil fuel. The mill
would then purchase the recovered waste heat from Thermal Energy at a discount
to current energy prices, resulting in over $40M in total fuel oil savings
over the life of the eight-year contract term.
    Initial estimates show the project would reduce fuel oil consumption by
105,000 barrels per year with commensurate annual emission reductions of
55,000 tons of CO2, and 625 tons of SO(2) - equivalent to permanently removing
more than 13,000 automobiles from the road.
    "As the cost of fuel oil continues to rise north of $100 per barrel,
Thermal Energy's suite of solutions is even more compelling to industrial
clients seeking to achieve operational cost savings and emission reductions,"
said Tim Angus, Thermal Energy President and CEO. "As a result, our typical
solution size for our clients continues to grow, with this project being
substantially larger than any in Thermal's history."
    "We also continue to experience tremendous demand for our THERMAL AUD(TM)
green energy supply program as it provides our clients the opportunity to
achieve significant energy reductions and environment benefits without the
requirement of any upfront capital expenditures," said Anthony Pugliese,
Thermal Energy Vice President, Sales. "This program further supports our
corporate client sales strategy focused on multi-site accounts whereby we can
demonstrate our technologies and roll them out in a streamlined approach
across a customer's entire portfolio."
    An earlier Letter of Intent had been released for this same client
related to the development of a DRY-REX(TM) feasibility study. This project
has been temporarily postponed as a result of the significant magnitude of
savings that can be realized via deployment of heat recovery solutions
applicable across the client's portfolio of facilities. It is anticipated that
this prior project will be revisited upon completion of the roll out of heat
recovery projects. Thermal Energy has additional DRY-REX(TM) projects in
development with clients in the North America, Europe and China.

    About Thermal Energy

    Thermal Energy International Inc. is an innovative technology company
providing custom energy and emission reduction, and bioenergy solutions.
Headquartered in Ottawa, Canada, TEI is a designer, design build developer,
fabricator, owner, operator and supplier of proprietary and patented energy
conservation, renewable energy and environmental technology solutions. Thermal
Energy is a fully accredited professional engineering firm, and offers
advanced process and applications engineering services. The Company is a proud
member of the Chicago Climate Exchange (CCX). FLU-ACE(R), DRY-REX(TM),
THERMALONOx(TM) and THERMALOZOMAx(TM), THERMAL AUD(TM) are trademarks of
Thermal Energy International. GEM(R) is a trademark used under exclusive
license from Gardner Energy Management Ltd.
    For more information about Thermal Energy International Inc.
(TSX-V: TMG), visit our website at www.thermalenergy.com.

    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
    %SEDAR: 00007994E




For further information:

For further information: Oliver Toffoli, Chief Operating Officer,
Thermal Energy International Inc., (613) 723-6776 x 209,
oliver.tofffoli@thermalenergy.com; Stuart McCarthy, Investor Relations and
Communications, Thermal Energy International Inc., (613) 723-6776 x 220,
stuart.mccarthy@thermalenergy.com

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