Oiltek secures nonbinding $350 million EPCC agreement with Bioseaga for Malaysian SAF plant

Oiltek International Ltd. announced April 6 that its wholly owned subsidiary Oiltek Sdn. Bhd. has entered into a heads of agreement (a nonbinding contract) with Bioseaga Industries Sdn. Bhd. for the provision of construction services of a sustainable aviation fuel (SAF) production facility with a planned capacity of 300 metric tons per day, or approximately 34 million gallons a year, to be located in Sabah, Malaysia.

According to Oiltek, the project will enable the company to further deepen its participation in the rapidly expanding SAF value chain.

Oiltek said the project represents a strategically significant opportunity for the group to leverage its established engineering, procurement, construction and commissioning (EPCC) capabilities, together with its relevant experience across the SAF value chain, in the execution and delivery of a large‑scale commercial development.

“By acting as the exclusive contractor of the project, it reinforces the group’s credentials as one of the leading solutions providers in renewable fuels and sustainable energy infrastructure,” Oiltek stated.

Based on the early-stage agreement, Oiltek Malaysia will act as the exclusive contractor for the project and will undertake EPCC services for the plant’s pretreatment facilities, SAF production plant, tank farm and logistic bulking infrastructure, and partial blending facilities.

Oiltek Malaysia shall also provide the preliminary necessary technical expertise and data required by BioSeaga and its advisor for financial modeling and project planning.

Subject to entry into of the definitive agreement, Oiltek Malaysia said it 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.

Execution of the definitive agreement is conditional upon secured project financing, regulatory approvals, land-right confirmation and mutual agreement on final technical specifications, pricing, work scope and any other terms.

The parties are expected to enter into a definitive agreement within six months.

The contract value for the project is estimated at approximately USD$350 million.