Oiltek International Ltd and Brunei-based BioSeaga Industries Sdn Bhd have entered into a heads of agreement to jointly develop a sustainable aviation fuel (SAF) biorefinery in Sabah, Malaysia. The project is estimated to cost US$350 million, or approximately RM1.65 billion.
The facility is planned to have a production capacity of 300 metric tonnes per day. It will utilize used cooking oil and palm oil mill effluent as its primary feedstocks.
Oiltek announced the development on April 6, 2026. The company expects the project to begin in the fourth quarter of 2026.
Strategic Role and Infrastructure
Oiltek’s Malaysian unit has been appointed as the exclusive engineering, procurement, construction, and commissioning (EPCC) partner for the project. In this capacity, the unit will be responsible for building the core infrastructure of the site.
The scope of the construction includes the production and pre-treatment facilities, as well as blending stations and tank farms.
Beyond its role as the exclusive contractor, Oiltek Malaysia holds the right of first refusal to participate in any joint venture, ownership opportunity, or equity investment related to the project or its future phases.
Market Impact and Corporate Context
The announcement led to a significant increase in Oiltek International’s share price, which rose 20.65% to close at $1.87. This move extended a year-to-date gain of 167.14%.
The scale of the contract is substantial relative to the company’s previous commitments. As of February 23, 2026, Oiltek’s entire disclosed order book was RM350 million.
Oiltek’s leadership views the project as a means to strengthen the company’s position within the sustainable energy infrastructure sector. Henry Yong, the chief executive officer and executive director of Oiltek, stated that the board believes the project will allow the group to further deepen its participation in the rapidly expanding sustainable aviation fuel value chain
.
The company described the venture as a strategically significant opportunity
that reinforces its credentials as a leading solutions provider for renewable fuels.
Regional Significance
The biorefinery is expected to establish Sabah as one of the largest production centers for sustainable aviation fuel in the region. According to Oiltek, the facility has the potential to eventually scale into a globally significant hub.
The partnership leverages the specific expertise of both firms, with BioSeaga Industries specializing in the development of renewable and sustainable fuels as well as food security.