In collaboration with strategic partners, a biorefinery facility will be established in Pengerang, Johor, and is expected to commence commercial operations by 2028.
OVER the past 12 months, the global oil and gas sector has faced a complex business landscape, driven by fluctuating market demand, geopolitical tensions, macroeconomic uncertainties, and a growing focus on energy transition.
As a national oil and gas company, Petroliam Nasional Berhad (PETRONAS) is not exempt from the challenges of the current global environment.
It is a responsibility the company must shoulder to ensure the future sustainability of the local and global energy industries.
To stay relevant and competitive, PETRONAS must act swiftly to identify growth opportunities amid ongoing industry challenges.
By doing this, the company must prioritise and execute strategic initiatives aimed at achieving its aspiration to become a progressive energy hub.
Since its establishment five decades ago, the company has emerged as a leading global energy player, driven by its integrated core businesses spanning upstream, downstream, gas and maritime business segments.
With the formation of Gentari in 2022, it has strengthened its position in the renewable energy and clean energy solutions business.
PETRONAS Dagangan Berhad and PETRONAS Trading Corporation Sdn Bhd are also actively involved in supplying bioenergy to their business partners, including providing SAF to several airline companies.
Seeking new horizons
PETRONAS has consistently explored new potential beyond its core business.
This includes expanding its downstream capabilities, such as exploring the development of biofuels to meet global demand and support future economic diversification.
The global energy company is actively working to build a sustainable bio-based value chain and a solid customer base.
In partnership with experienced global players, Italy’s Enilive and Japan’s Euglena, PETRONAS will be developing its first biorefinery which reached the Final Investment Decision (FID) in July last year.
The biorefinery will be located in Pengerang, Johor and is set to begin commercial operations in 2028. This plant will play a key role in advancing the global bioeconomy and producing affordable clean energy solutions while supporting Malaysia’s National Energy Transition Roadmap.
With the capability of the new biorefinery, PETRONAS will be able to meet the growing and focused needs of its partners and customers, driven by the increasing demand for sustainable fuels.
Moreover, the plant will have the capacity to produce Sustainable Aviation Fuel (SAF), Hydrotreated Vegetable Oil (HVO) and bio-naphtha to meet the rising demand in Asia and other regions.
As a progressive energy company, PETRONAS, through PETRONAS Dagangan Berhad and PETRONAS Trading Corporation Sdn Bhd, has been actively supplying biofuels to its business partners ahead of the biorefinery plant’s completion.
This includes supplying SAF to several airlines, reinforcing confidence in its ability to deliver said products.
Its commitment to supplying SAF plays a crucial role in supporting the sustainability agendas of its partners and industries.
This also prepares the company to meet the requirements of the international Carbon Offsetting and Reduction Scheme for International Aviation, a global initiative developed by the International Civil Aviation Organization to reduce carbon footprint and achieve carbon-neutral growth in the international aviation sector.
Sazali says that PETRONAS, together with partners, will leverage the respective strengths and expertise to advance global bioeconomy.
Sustainable partnerships
Beyond the aviation industry, PETRONAS had powered the Mercedes-AMG PETRONAS Formula One team’s trucks and generators with the supply of HVO100 across two European race seasons in 2023 and 2024.
In collaboration with Vitol, it successfully conducted its first marine biofuel bunkering in Singapore, supplying sustainable marine fuel B24 – a blend containing 24% used cooking oil – onboard the MT Lady Aegina.
Securing raw materials is a crucial component in establishing a robust bio-feedstock supply chain. Through a Memorandum of Understanding signed with the Malaysian Palm Oil Board, PETRONAS is exploring the viability and accessibility of bio-feedstock and palm oil waste for SAF production to achieve this objective.
PETRONAS executive vice president and chief executive officer for Downstream, Datuk Sazali Hamzah said, “This new potential will strengthen PETRONAS’ position in the biofuel supply chain beyond trading, opening the door to the creation of a comprehensive bio-based ecosystem in Malaysia.
“Together with our partners, we will leverage our respective strengths and expertise to advance the global bioeconomy and deliver affordable, accessible clean energy solutions to customers worldwide, fulfilling our Net Zero Carbon Emissions aspiration by 2050,” he added.
In addition, PETRONAS will produce and supply Advanced Sustainable Fuel (ASF) to the Mercedes-AMG PETRONAS Formula One team to meet Formula One’s new regulations, which aims for 100% usage of sustainable fuel in 2026.
Its achievements so far reflect its commitment to strategic collaborations in its pursuit of becoming a global energy hub.
The company’s resilience in meeting the demand for new energy and ensuring energy security will further solidify its position as a national oil company that operates as a progressive, responsible international oil company.
