R&D Project with Shell UK Ltd

TEG Environmental Plc
27 July 2006


For Release                        7:00 a.m.                     28 July 2006


                         TEG ENVIRONMENTAL PLC (TEG.L)

                        Research and Development Project

                                   Between

                   TEG ENVIRONMENTAL PLC and SHELL UK Limited


TEG Environmental Plc ('TEG'), the cutting edge green technology company, which
converts organic wastes into natural organic fertiliser, has entered into a
Research and Development Project with Shell UK Limited to investigate the
opportunities for the composting of oil based mud drill cuttings from North Sea
exploration activities using TEG Silo Cage Technology. The Contract is initially
to trial bioremediation of oil based mud cuttings and if this is successful the
parties will consider further the commercial potential to develop TEG Silo Cage
plants for oil based mud drill cutting processing.

Oil drill cuttings is a waste stream that arises during oil and gas drilling
activity. The material contains oil-based mud and is classified as a hazardous
waste. Currently, oil drill cuttings are subjected to thermal processing and the
residue is disposed of in hazardous waste landfill sites. The R&D work will
focus on bioremediation of oil based mud drill cuttings, which, if successful
would convert a hazardous waste to a non-hazardous end product.

The Project is for Shell to fund Research & Development work by TEG followed by
full-scale trials at TEG's plant in Perth, Scotland. Macaulay Enterprises
Limited, the commercial arm of the Macaulay Institute and a specialist
environmental consultancy and laboratory services company, will work with the
parties assessing the products and potential end use opportunities. It is
intended that the R&D work will be carried out between July and October 2006 and
the pilot scale work will begin in November 06, assuming regulatory approval at
the site in Perth.


Kathleen Howard, Project Leader, Shell Exporation & Production said:

' We are delighted to have the opportunity to work with TEG Environmental on
this research project and are optimistic about developing new cutting-edge
technology.

This project underlines our continued commitment to develop new environmentally
friendly technologies in the global oil and gas industry.'

Commenting on the research and development project, Chief Executive of TEG Mick
Fishwick said:

'We are of course delighted to reach agreement with a company like Shell and to
be a part of their progressive approach in environmental management and we are
optimistic of success in our trial work.

The control from a TEG Silo Cage system lends itself to processing difficult
waste streams and the rapid, dry composting process is ideal for environmental
control and consistent product quality. This of course represents a significant
potential opportunity for TEG, but at the same time we must be prudent and
realistic; while the laboratory trials we have carried out previously on oil
based mud drill cuttings have been very encouraging, they have nevertheless been
on a small scale and there are still a number of hurdles to be overcome before
the TEG process can become a proven commercial option for the treatment of such
materials.'


ENDS



Contact:

TEG Environmental Group Plc                         Tel: [phone]
Michael Fishwick, Chief Executive

Adventis Financial PR                               Tel: [phone]
Tarquin Edwards                                     Mob: [phone]





Editor's Notes:

TEG provides an in-vessel composting technology, which is one of the few
approved technologies capable of treating animal by-product (ABP) waste. Plant
economics are predominantly driven by the gate fees charged, rather than the
value of the end product (compost). The TEG process is an economic alternative
to landfill.

The Silo Cage system, one of the few technologies in Europe capable of treating
this waste, is a natural process producing compost as an end product, used as an
excellent soil conditioner that fertilizes, retains moisture, provides structure
and reduces the incidence of plant disease. TEG's Silo-Cages will be housed in a
self-contained building, are not unsightly and are environmentally friendly.

Potential customers include local authorities, waste management companies, food
processors, farmers and landowners. The Company's expanding market is driven by
increasingly stringent EU and UK legislation regulating the treatment and
disposal of organic waste. Statutory targets for the diversion of waste from
landfill increase annually through to 2020, increasing TEG's market opportunity
year on year. The Waste Resource Action Programme estimates that 450 composting
plants will be needed by 2020 to satisfy local authority requirements alone, and
there is increasing demand from the private sector driven by ABP legislation.



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