Oiltek to co-develop US$350 million sustainable aviation fuel facility in Sabah

[SINGAPORE] Oiltek on Monday (Apr 6) announced plans to jointly develop a US$350 million sustainable aviation fuel biorefinery in Sabah, Malaysia, with Brunei-based renewable fuel company BioSeaga Industries.

The facility will have a planned capacity of 300 tonnes a day, utilising palm oil mill effluent and used cooking oil as primary feedstocks, said Oiltek.

Upon completion, it is expected to position Sabah as one of the largest production centres of the fuel in the region, with the potential to scale into a globally significant hub, added the oil player.

“The board is of the view that the project will enable the group to further deepen its participation in the rapidly expanding sustainable aviation fuel value chain,” said Oiltek CEO and executive director Henry Yong.

The joint venture tapped the mainboard-listed company’s Malaysian unit as the exclusive engineering, procurement, construction and commissioning partner for the project. The unit will build the site’s core infrastructure, including its pre-treatment and production facilities, tank farms and blending stations.

Oiltek Malaysia will also have the right of first refusal to participate in any equity investment, joint venture or ownership opportunity related to the project or its subsequent phases, said its parent company.

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The first phase of the project will carry an estimated development value of US$350 million, with a possible future expansion into advanced fuels including green hydrogen and other low-carbon energy derivatives.

The development is expected to kick off in the fourth quarter of 2026.

Designed as a multi-feedstock, modular and scalable biorefinery, the project will form part of a “broader integrated sustainable aviation fuel ecosystem spanning production, blending and export”.