EXHIBIT 4.18
                              CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is entered into effective as of the 15th
day of January 1999, by and between SGI International, a Utah corporation (the
"Company") and Jeff Parson ("Consultant").

AGREEMENT

NOW, THEREFORE, in consideration of the agreements, covenants, and conditions
contained herein, Company and Consultant hereby agree as follows:

1. Performance by Consultant. Consultant agrees to provide consulting services
(the "Services") to the Company, including consultation relative to the
performance, data, measurement, analysis, and recommendations as to the
development and improvement of the OCET technology. Services shall also include,
but not be limited to, advice, assistance, and information supplied by
Consultant, or developed with the use of any of Consultant's information,
equipment, personnel, goods or facilities pertaining to the Company and the OCET
technology. The specific tasks will be agreed to in writing by the Company and
Consultant.

2. Payment for Services.

a. Consulting Fee. Company agrees to pay Consultant for the Services at the
rate of _______________ Dollars ($_______) per hour and prorated for less than
one hour.

b. Expenses. Consultant shall be reimbursed for reasonable expenses, including
but not limited to travel, long distance telephone charges, and mileage at the
rate of $.31 a mile.

c. Warrants. At the discretion of the Company's Board of Directors, the Company
may grant Consultant a warrant or warrants for his services provided, however,
that warrants are not issued in lieu of payments pursuant to Section 2(a) or
2(b).

d. Invoices. Consultant shall invoice Company monthly for Services rendered
during the preceding month. The invoice will describe the work performed during
such period, set out the hours of work by day and by task and reflect the
amount and details of any expenses. Consultant agrees that Company may audit
the billing and expense documentation for a period of one year from the date of
the invoice submittal. All invoices will be due and payable by Company within
thirty (30) days after receipt of invoice.

3. Obligations of Consultant.

a. Key Person. Company and Consultant agree that the Services will be performed
personally by Ebbe Skov or his designee provided such designee is approved by
the Company pursuant to Section 12.

b. Consultations, Reports. Consultant agrees upon reasonable advance notice to
make available Ebbe Skov for meetings requested by the Company. If Company
requests it, Consultant shall prepare and submit to Company a monthly written
report setting forth the status of such work performed in a format to be
mutually agreed upon by Consultant and Company.

c. Regeneration of Lost or Damaged Data. Consultant shall, at its own expense,
promptly replace or regenerate any work that does not meet the requirements of
this Agreement including regeneration of new data and reperform any work or
recover damaged data from Consultant's or Company's data sources.

4. Obligations of Company. Company agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required by
Consultant to perform and complete the Services.

5. Confidentiality, Disclosure, and Ownership.
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a. Ownership. Consultant agrees that the Company is the owner of all right,
title and interest in the technical information and data (the "Technical
Information") relating to the drying, cleaning and other processing of coal,
bitumen, crude oil, resid and other carbonaceous material and oil materials that
Company has developed, as well as any developments or improvements related
thereto, and any related process control technology, computational techniques or
related trade secrets or intellectual property. Company shall also own all other
related material used by, developed and paid for by it in connection with the
performance of any Services provided by Consultant pursuant to this Agreement.

b. Disclosure. Consultant desires to have the Technical Information disclosed
to him to enable him to render the Services to Company. Company is prepared to
make such Technical Information as it deems necessary available to Consultant
for the aforesaid purpose on the following understanding:

For the purpose of this Agreement:

The term "Technical Information and Data" shall not include any information
which:

(i) is "publicly available" information. The phrase "publicly available"
information shall mean readily accessible to the public in a written
publication;

(ii) is known to Consultant from sources other than Company or its Affiliates
prior to the receipt of the same hereunder from Company or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from third
party who is legally in possession of such information and has a right to
reveal the same to Consultant.

(iv) "Affiliate(s)" of Company shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with Company.

(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with the
physical embodiment of same whether copyrightable or not, related to Company's
business.

c. Notwithstanding anything herein to the contrary, Consultant shall have the
right to use general skills and capabilities developed as a result of his
performance of Services for his own benefit or the benefit of others subject
to the obligations of Consultant set forth hereinafter.

d. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it, except
as herein authorized in writing or as may later be authorized in writing by
Company.

e. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, the purpose
previously stated herein.

6. Development and Assignment.

a. Developments. Consultant recognizes that Developments made by Consultant or
Company have occurred and/or are expected and likely to occur in the future as
the result of the performance of Consultant's Services, and Consultant
covenants and agrees to hold all Developments as a result of the performance of
such Services or based on Company's Technical Information in trust for the use
and benefit of Company, and hereby assigns and agrees to assign all such
Developments to Company.
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b. Consultant Disclosure. Consultant shall promptly disclose in writing to
Company any and all Developments made by Consultant, and or any members of
his staff, incident to or as a result of the performance of such Services; and
Consultant hereby assigns and agrees to assign all of its right, title and
interest, in all such Developments to Company. All such Developments shall be
treated as Technical Information of Company and the obligations of this
Agreement shall apply thereto. Consultant further agrees to and does hereby
assign to Company all right, title and interest in and to the intellectual
property, rights, and processes or techniques embodying the Developments,
including all rights of copyright or rights to patent or use as a trade secret
such Developments, both within the United States and throughout the world.

c. Assignment. Consultant shall execute and/or require his agents, servants or
employees to execute all applications, assignments, or other instruments of
any kind which Company, at Company's expense, shall deem proper or necessary to
apply for, obtain and enforce letters patent and/or copyright of the United
States or any foreign country or otherwise to protect Company's interest in
such Developments.

d. Retention. Unless otherwise authorized in writing by Company, all documents,
drawings and writings provided to Consultant by Company hereunder or developed
by Consultant hereunder, and all copies thereof shall be returned promptly to
Company upon completion or termination of the Services hereunder.

e. The obligations of Section 5 and 6 are continuing and shall survive the
termination of this Agreement for a period three (3) years.

7. Warranties. Consultant hereby warrants that he will carry out his work in
accord with generally accepted practices. Company's sole remedy shall consist of
the reperformance of any disputed work. Company must notify Consultant of any
dissatisfaction with the work of Consultant within thirty (30) days after
completion of the work in question.

8. Termination. This Agreement shall be effective on the Effective Date and
continue in full force and effect until terminated by either party. Either
party may terminate this Agreement on thirty (30) days notice to the other
party by so stating in writing to the other party.

9. Status, Liability, Indemnity.

a. Independent Contractor. Consultant is and at all times during the term of
this Agreement shall be an independent contractor providing professional
consulting services to Company. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the parties.
Consultant shall have no power to commit or bind Company in any manner
whatsoever.

b. Liability Indemnity. Company shall have no liability to Consultant or to
others for acts of Consultant. Consultant shall defend, indemnify, and hold
harmless Company from and against any and all claims of whatsoever kind and
nature arising out of the negligent acts or omissions of Consultant,
Consultant's employees or others acting for or representing Consultant.
Likewise, Consultant shall have no liabilities to Company or to others for acts
of Company. Company shall defend, indemnify, and hold harmless Consultant from
and against any and all claims of whatsoever kind and nature arising out of the
negligent acts or omissions of Company, Company's employees, or others
(excepting Consultant) representing Company.

10. Limitation of Liability. In no event shall either of the parties hereto be
liable to the other for the payment of any consequential, indirect, or special
damages, including lost profits. The provisions of this Section, shall not apply
in any way to Consultant's obligations to replace, regenerate or obtain lost or
damaged data or to indemnify any party.

11. Injunctive Relief. It is hereby understood and agreed that damages shall be
an inadequate remedy in the event of a breach by Consultant of this Agreement
and that any such breach by Consultant will cause Company great and irreparable
injury and damage. Accordingly, Consultant agrees that Company shall be
entitled, without waiving any additional rights or remedies otherwise available
to Company at law or in equity or by statute, to injunctive and other equitable
relief in the event of a breach or intended or threatened breach by Consultant
of this Agreement or any Supplement.

12. Assignment.
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a. Consent Required. Consultant shall not assign or subcontract the whole or
any part of this Agreement without Company's written consent, which can be
withheld for any reason.

b. Subcontracting. Any subcontract made by Consultant with the consent of
Company, which must be obtained before Consultant enters into any subcontract,
shall incorporate by reference all of the terms of this Agreement. Consultant
agrees to guarantee the performance of any subcontractor used in the
performance of the Services.

13. Conflicting Assignments. During the term of this Agreement, Consultant shall
not accept any conflicting assignments, which would put Consultant in a position
where he would be rendering advice to a potential competitor of the OCET
Technology or providing advice, which might disclose any of the techniques or
Technical Information related to the OCET Technology.

14. Conformity with Laws. Consultant shall be responsible for compliance with
all laws or regulations applicable to the Services being provided under this
Agreement. Consultant shall directly receive, respond to, defend and be
responsible for any citation, assessment, fine or penalty because of its failure
to comply with such laws or regulations.

15. Disputes. If any dispute of any kind arises between the parties with respect
to the Consultant's performance under this Agreement, then the dispute shall be
submitted to arbitration in San Diego, California to the American Arbitration
Association ("AAA"). The dispute shall be submitted to an arbitrator selected
from a panel of arbitrators submitted to the parties by the AAA. If the parties
fail to agree on an arbitrator, the AAA shall appoint an arbitrator and in the
absence of such appointment, the parties may request an appointment by request
to the San Diego Superior Court. Reasonable discovery shall be allowed in any
such arbitration. The decision of the arbitrator shall be binding to the same
extent as if the award were made by a court of competent jurisdiction.

16. Insurance Coverage. During the term of this Agreement Consultant shall
obtain at its own expense and maintain in full force and effect the following
insurance coverage in the amounts specified.

16.1 Employer's Liability Insurance. Consultant shall obtain, if applicable,
and maintain Statutory Worker's Compensation and Employers Liability Insurance
as required by law.

16.2 Automobile Bodily Injury and Property Damage Liability Insurance.
Consultant shall obtain and maintain automobile bodily injury and property
damage liability insurance covering automobiles owned by or hired by Consultant
with limits of at least $100,000 each occurrence for bodily injury and for
property damage.

17. Notices. Any and all notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given or received when delivered
personally or forty eight (48) hours after being mailed, via first class,
postage prepaid, to the addresses set forth immediately below of the parties
hereto or to such other addresses as either of the parties hereto may from time
to time designate in writing to the other party.

Company: SGI International
1200 Prospect, Suite 325
La Jolla, CA 90037

Consultant: Jeff Parsons

18. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.

19. Entire Agreement and Amendments. This Agreement constitutes the entire
understanding and agreement between the parties relating to the subject matter
hereof and supersedes any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered, or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties, that
expressly references this Agreement.
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20. Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed a
waiver of that party's right thereafter to enforce each and every provision of
the Agreement and shall not otherwise affect the validity of this Agreement.

21. Severability. If any provision of this Agreement is finally determined to be
contrary to, prohibited by, or invalid under applicable laws or regulations,
such provision shall become inapplicable and shall be deemed omitted from this
Agreement. Such determination shall not, however, in any way invalidate the
remaining provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

                                        Company Consultant

SGI International,
a Utah Corporation

By: /s/ MICHAEL L. ROSE                 By: /s/ JEFF PARSONS
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Michael L. Rose                         Jeff Parsons
President & Chief Operating Officer