PETRONAS reaches FID on Pengerang biorefinery

The biorefinery is targeted to be operational by the second half of 2028.

PETALING JAYA: Petroliam Nasional Bhd (PETRONAS) and venture partners Enilive S.p.A and Euglena Co Ltd have reached the final investment decision (FID) to develop a biorefinery in Pengerang Integrated Complex (PIC) in Johor.

The venture partners will establish a joint-venture company in Malaysia to construct and operate the biorefinery with PETRONAS Mobility Lestari Sdn Bhd, a subsidiary of PETRONAS, and Enilive as the largest shareholders, a statement from PETRONAS stated yesterday.

The biorefinery is targeted to be operational by the second half of 2028 and produce sustainable aviation fuel (SAF) and other biofuels such as renewable diesel/hydrogenated vegetable oil (HVO).

Malaysia’s national oil company (NOC) noted the construction of the facility is expected to begin in the fourth quarter of this year, and upon completion, will have the capability to process about 650,000 tonnes per year of raw materials to produce SAF, HVO and bio-naphtha.

The investment amount was not disclosed.

“The wastes and residue feedstocks for the biorefinery 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,” PETRONAS noted.

PETRONAS vice-president of refining, trading and marketing Ahmad Adly Alias said, “This milestone will solidify PETRONAS’ standing in the biofuels value chain beyond trading, paving the way for the establishment of a holistic bio-based ecosystem in Malaysia that will offer a feasible and sustainable solution to reducing carbon emissions.

“Together with our partners Enilive and Euglena, we will advance the global bio-based economy and deliver affordable, accessible cleaner energy solutions to customers worldwide, particularly for Asia Pacific,” he stated.

He added the project will contribute towards the National Energy Transition Roadmap (NETR) and help PETRONAS progress towards its net-zero carbon emissions 2050 aspiration.

Separately, PETRONAS signed production sharing contracts (PSCs) for three clusters of discovered resource opportunities (DRO) marketed under the Malaysia Bid Round Plus (MBR+) Round I. The fields are located offshore Peninsular Malaysia.

Under the small field asset (SFA) cluster PSC, the NOC awarded the Bubu, Bunga Tasbih and Enau fields to Ping Petroleum Sdn Bhd and Duta Marine Sdn Bhd.

Ping, which is a subsidiary of Dagang Nexchange Bhd, will hold a 90% interest in the PSC with Duta Marine the rest.

The newly signed cluster lies between four km and eight km from Ping’s existing Abu Custer asset, providing significant synergy potential.

The second PSC was signed with Jadestone Energy (PM) Inc for four fields, namely, Puteri, Padang, Penara and North Lukut.

The Pertang, Kenarong, Noring and Bedong fields were awarded to Hibiscus Oil & Gas Malaysia Ltd and PETRONAS Carigali Sdn Bhd under the improved revenue over cost terms. Hibiscus will hold a 65% interest in the PSC with Carigali the remaining.

All the fields, comprising oil and gas assets within the Malay basin in Peninsular Malaysia are located within a proven hydrocarbon basin and in close proximity to existing infrastructure.

PETRONAS added it will be signing more MBR+ PSCs in the coming weeks.