Malaysia advances in the race for SAF: Vandelay Ventures readies 75 million gallon project using Sulzer tech 

Earlier this week, we reported that Vandelay Ventures has embarked on development of a 250,000 tonne (75 million gallons / 5000 barrels per day) production facility for sustainable aviation fuels and renewable diesel. 

The project will be located at the Sabah Maju Jaya Renewable Energy Industrial Complex (SMJREIC) in Sapangar Bay, Kota Kinabalu, Malaysia.  The complex will also host an Edible Oil Bulking Terminal with a capacity of 30,000 metric tonnes, a Palm Oil Refinery (100,000 metric tonnes) and the SAF/RD plant.

Let’s look at this project and the advances in Malaysia in more depth today. 

The background on the region

First, as background, KK is the thriving heart of the rapidly expanding commerce of Sabah, the northernmost state on the island of Borneo. Think oil palm, and think petroleum infrastructure too. Also, picture growth that has led to logjams, and a drive to rapidly expand the facilities at Sepanggar. Not long ago, Suria Capital Holdings stepped into the lead in that development effort, and while biodiesel is well established here, Suria inked a MOU with Vandelay Ventures to develop what became SMJREIC with an initial investment of $150 million.

The centerpiece? The 250,000 tonne SAF and RD plant, which will lean on palm oil feedstocks, primarily from the palm-rich west coast and interior of Sabah. But we say lean and not depend, At least 60 percent of the feedstock the company said will come from used cooking oil, waste animal fats and other industrial and agricultural residual products. Perhaps more, the 100,000 tonne palm oil refining complex also under development may well support other palm oil applications including cooking oil.

The foundational tech agreement

Under the agreement, Sulzer Chemtech, in cooperation with Duke Technologies LLC, will provide its BioFlux licensed technology, basic engineering packages and technical services to the SMJREIC facility. These will enable the hydrotreatment of bio-based feedstocks and their selective conversion into high-quality SAF and renewable diesel.

Progress to date

The first phase of the development is the 30-50,000 metric tonne bulking facility, that’s scheduled for completion later this month. Phase two is the HVO plant and ultimately the SAF and RD project.

The technology backstory

The BioFlux technology is a cost-effective, energy- and resource-efficient solution for the production of more sustainable fuels and can reduce carbon intensity by up to 11%, compared to conventional hydrotreating units.

The partners

infrastructure. Suria outlined that its subsidiary, Sabah Ports Sdn Bhd, would support the import and export of raw materials and duels. Sabah Ports is the state’s largest port operator. Feedstock: Sawit Kinabalu and SLDB. Technology: The afore-mentioned Sulzer. Finance: THINKAT Advisory.

The Malaysia SAF story

Malaysia has been accelerating on SAF. 

Last month, we reported that Malaysia and the European Union agreed to explore further cooperation with the aim of developing sustainable aviation fuel,

In July we reported that China-based Shanxi Construction Investment Group. the Institute of Coal Chemistry, and the Chinese Academy of Sciences would join a SAF JV with Pengerang Maritime Industries and Sabah Oil and Gas Development Corporation.

Also, In May we reported that Malaysia Airlines operated the first passenger flight using Sustainable Aviation Fuel between Kuala Lumpur and Singapore in conjunction with World Environment Day. The dedicated SAF-powered flights on 5 June were operated on Boeing 737-800 aircraft, using a blend of approximately 38% SAF and conventional jet fuel.

The Bottom Line

Malaysia has significant greenhouse gas emission targets, and a drive towards Net Zero in aviation is going to be an important component of that drive. So, the SAF announce is unsurprising in that sense — the expansion beyond palm oil is a bit of a surprise, and the pace of progress has been impressive. Not to mention, the addition of world class tech from Sulzer. We rate this a must-watch — it’s a roadmap for similar projects through Southeast Asia.

Reaction from the stakeholders

Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor: “I am happy that Suria Capital Holdings Bhd has added another promising investment portfolio to the list of successful private-driven ventures in the State. I look forward to seeing the fruition of this MoU in the near future. As the Chief Minister of Sabah, I am glad that this collaboration involves Suria Capital Holding Berhad, which is one of the state’s most reputable public limited companies, as they will play a big role in helping to ensure this project is viable and implemented successfully. The State Government welcomes the private sector’s role in fueling the economy. We can see, for example, the robustness of the property sector; the re-surging of the oil and gas industry; and the re-planting of trees in the forestry sector. Greater push in private-driven initiatives will boost the economic momentum in these industries; spur the flow of investments; enhance overall economic diversification; increase wider economic opportunities and create related spillovers.

Haji Mohamed Mohar, CEO at Vandelay Ventures Sdn Bhd, comments: “With our renewable fuels complex we aim to drive the decarbonization of the transportation as well as the manufacturing industries. We can achieve this with Sulzer Chemtech’s leading technology and expertise, as BioFlux will help us use more sustainable feedstocks at a large scale as well as minimize the environmental impact of biofuel production.”

Sander van Donk, Global Business Unit Head for Clean Fuels and Chemicals Licensing at Sulzer Chemtech, adds: “This is a truly ambitious project, and we are proud to be part of it to open the door to a net-zero carbon energy future. We look forward to leveraging our BioFlux technology and engineering capabilities to support one of the largest, low-carbon renewable fuels plants in South-East Asia.”