BioSeaga Industries Sdn Bhd and Oiltek Sdn Bhd have signed an agreement to set up a $350 million (RM1.65 billion) sustainable aviation fuel (SAF) plant in Sabah, marking a significant step in the region’s push toward cleaner energy, Daily Express reported.
The proposed facility will have a planned capacity of about 300 metric tonnes per day and will use palm oil mill effluent (POME) and used cooking oil (UCO) as feedstock.
The first phase of the project is valued at $350 million, with a second phase planned to expand into production of black pellets and green hydrogen.
Company officials said the project is aimed at boosting sustainable fuel production while supporting environmental goals in the region. BioSeaga’s chairman said the focus remains on developing high-impact clean fuel projects, while its chief executive noted that global partners are being engaged to ensure smooth execution.
Oiltek’s leadership said the company is well placed to deliver the required technology and engineering capabilities for the project.
The facility is expected to begin operations in the fourth quarter of 2026. Around one-third of the output will be used domestically as aviation fuel, while the remaining volume will be exported via Brunei after blending.
