December 13, 2024 [The Edge Malaysia]- South Korean engineering firm Samsung E&A said on Thursday that it has been awarded a contract to build a refinery in Malaysia to produce sustainable aviation fuel (SAF) and other biofuels.
The contract from Italian oil supermajor Eni SpA on behalf of a joint venture with Malaysia’s Petroliam Nasional Bhd (Petronas) and Japan’s Euglena Co Ltd, is valued at US$955 million (RM4.43 billion), Samsung E&A said in a statement. The contract is expected to be signed by the end of January 2025.
The engineering, procurement, construction and commissioning (EPCC) contract’s completion date was not specified, though the Euglena has previously said the biorefinery is expected to be operational by the second half of 2028.
The EPCC contract follows a final investment decision made by Petronas and its partners to develop the project, which is worth over RM6 billion. Petronas and Eni will each initially hold a 47.5% stake in the joint venture, while Euglena will start with 5%, with the option to raise its stake to 15%.
This biorefinery will be located within the Pengerang Integrated Complex in Johor, and upon completion, handle up to about 650,000 tonnes per year of raw materials to produce SAF, hydrogenated vegetable oil, and bio-naphtha.
The planned feedstock will comprise used vegetable oils, animal fats, waste from the processing of vegetable oils, and other biomass, including microalgae oils, which will be explored in the mid-term.
The project comes at a time when major economies are mandating the adoption of SAF.
The European Union (EU) will require at least 2% SAF blends in aviation fuel at the region’s airports from next year onwards, while Singapore will introduce a 1% or higher SAF requirement by 2026. South Korea also plans to introduce mandatory SAF blending from 2027.
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