Oiltek International Ltd Secures a US $350 Million Contract for a Large‑Scale Sustainable Aviation Fuel (SAF) Biorefinery in Sabah

On 6 April 2026, Oiltek International Ltd, a Singapore Exchange‑listed company, announced that it had entered into a heads‑of‑agreement (HOA) with Brunei‑based BioSeaga Industries Sdn Bhd to develop a sustainable aviation fuel biorefinery in Sabah, Malaysia. The project, valued at approximately US $350 million (RM 1.65 billion), will feature a planned production capacity of 300 metric tonnes per day and is expected to commence operations in the fourth quarter of 2026.

Project Scope and Technical Details

Oiltek’s wholly‑owned subsidiary, Oiltek Malaysia, will act as the exclusive engineering, procurement, construction and commissioning (EPCC) partner for several key components of the facility:

  • Pre‑treatment facilities
  • SAF production plant
  • Tank farm and logistic bulking infrastructure
  • Partial blending facilities

The design is intended to be modular, scalable, and capable of handling multiple feedstocks. The initial feedstocks will be palm oil mill effluent (POME) and used cooking oil (UCO), both of which are abundant in the region. Future expansion is planned to incorporate advanced fuels, including green hydrogen and other low‑carbon energy derivatives.

Oiltek Malaysia will also hold a right of first refusal to participate in any subsequent equity investment or joint‑venture arrangements related to the project or its later phases. This provision positions Oiltek to potentially increase its ownership stake as the project evolves.

Strategic Implications

The partnership aligns with the global push to decarbonise aviation. By leveraging locally sourced biomass and waste streams, the Sabahan facility aims to reduce the carbon intensity of jet fuel. The project is expected to establish Sabah as a significant SAF hub in Southeast Asia, potentially serving as a gateway for regional and global aviation markets.

For Oiltek International, the contract represents a substantial addition to its order book, which, as of 23 February 2026, had totaled only RM 350 million. Securing this new contract effectively doubles the company’s confirmed project value, reinforcing its position as a key player in the low‑carbon energy transition.

Financial Context

As of 1 April 2026, Oiltek International’s share price stood at SGD 1.55, with a 52‑week high of SGD 1.58 and a low of SGD 0.31 recorded in April 2025. The company’s market capitalization was SGD 664,949,952, and its price‑to‑earnings ratio was 65.23. While the new project may not immediately translate into earnings, the long‑term upside from SAF production and potential equity participation could positively influence future profitability.

Conclusion

Oiltek International Ltd’s agreement to develop a large‑scale sustainable aviation fuel biorefinery in Sabah marks a pivotal moment for the company and the broader low‑carbon energy sector. By combining engineering expertise, scalable design, and a robust feedstock supply chain, Oiltek is positioned to contribute significantly to global aviation decarbonisation efforts while unlocking new growth avenues for its shareholders.