Oiltek secures key role in RM1.65 billion SAF project in Sabah

KUCHING (April 6): Oiltek International Ltd has been appointed as the exclusive contractor for a major RM1.65 billion sustainable aviation fuel (SAF) project in Sabah, marking a significant step forward in Malaysia’s push for greener energy and aviation solutions.

The Singapore Exchange-listed company entered into a heads of agreement with BioSeaga Industries Sdn Bhd to jointly develop a large-scale SAF biorefinery with a planned production capacity of 300 metric tonnes per day.

Under the agreement, Oiltek’s wholly owned subsidiary, Oiltek Sdn Bhd, will undertake engineering, procurement, construction and commissioning (EPCC) works for the facility.

The scope includes pre-treatment units, the SAF production plant, storage infrastructure, and blending facilities.

The project, expected to commence in the fourth quarter of 2026, will use sustainable feedstocks such as palm oil mill effluent (POME) and used cooking oil (UCO), reinforcing Sabahís role in advancing renewable energy initiatives.

Oiltek chief executive officer Henry Yong Khai Weng said the development represents a strategic milestone for the group.

“This project allows us to deepen our participation in the rapidly expanding SAF value chain. It is a significant opportunity to leverage our engineering expertise in delivering a large-scale, commercially viable renewable energy project,” he said.

He added that the facility is designed as a modular and scalable biorefinery, enabling future expansion into advanced fuels such as green hydrogen and other low-carbon energy derivatives.

Industry observers note that the project could position Sabah as one of the largest SAF production centres in Southeast Asia, supporting global efforts to decarbonise the aviation sector.

In addition to its role as EPCC contractor, Oiltek Malaysia has secured the right of first refusal for potential equity participation or joint venture opportunities in future phases of the project.

The development aligns with Malaysiaís broader energy transition agenda and is expected to generate economic opportunities in Sabah, including job creation and infrastructure development.

With over four decades of experience and projects spanning more than 37 countries, Oiltek continues to expand its footprint in renewable energy, further strengthening its position as a global engineering solutions provider.