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Joint Venture development of BioCNG plant in Lahad Datu
Published on: Thursday, February 29, 2024
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Joint Venture development of BioCNG plant in Lahad Datu
From left: Kwantas Director Dato’ Winson Chong, Kwantas Group CEO Alvin Kwan, Cenergi Group CEO Hairol Tajudin, and Cenergi Group CBDO Ir. Kwok Yew Hoe after the joint venture signing ceremony on Feb 27.
Kota Kinabalu: Cenergi SEA Berhad (Cenergi), a subsidiary of UEM Group Berhad, and Kwantas Corporation Berhad (Kwantas), a Sabah-based integrated palm oil producer involved in the entire palm oil supply chain business with presence in Malaysia and China, have entered into a joint venture (JV) partnership to undertake the development, construction and operations of a Bio Compressed Natural Gas (BioCNG) plant in Lahad Datu. 

Cenergi and Kwantas will jointly undertake the development, construction, operations and maintenance of the BioCNG plant at Kwantas’ Pintasan Palm Oil Mill in Lahad Datu, expected to be operational by the second quarter of 2025. 

The plant will generate biogas through anaerobic digestion of Pome (Palm Oil Mill Effluent) and a process of purification and compression of the biogas, converting the biogas into BioCNG. 

BioCNG has a gas composition similar to that of natural gas, enabling it to be used in the same way for heating and power. 

The BioCNG produced by this facility will be compressed into cylinder tubes and supplied to industrial off-takers in Lahad Datu via trailers that transport the cylinder tubes. 

BioCNG is considered an environmentally friendly renewable gas derived from wastes of palm oil mills, and it will enable users to reduce their carbon emissions towards their net zero goals.

This development enables the start of an ecosystem which further supports the greening of the palm oil industry. 

Cenergi Group CEO Hairol Azizi Tajudin said to date, Cenergi has a portfolio of a total of 33 biogas to electricity plants in Peninsular Malaysia, including those under construction, which harness biogas from palm oil mill effluent (POME) and convert it to electricity for injection into the grid through Sustainable Energy Development Authority’s (Seda) Feed-in-Tariff programme. 

“This partnership marks Cenergi’s inaugural venture into biogas development in Sabah, and we are excited to play a part in enhancing the renewable energy options available to the industry.

Our goal is to deliver sustainable BioCNG for industrial players in Sabah, meeting the rising energy demand, particularly in the East Coast region. 

“This investment will contribute to a new path for the harnessing of wastes from the palm oil industry into environmentally friendly products,” he said.  

Kwantas Group CEO Alvin Kwan said Kwantas was excited to announce the partnership with Cenergi to launch the BioCNG plant as this marked Kwantas first Biogas renewable energy project in Sabah. 

“Our ultimate goal is to reduce carbon footprint and tackle climate change issues by capturing gas emissions from the POME and converting it into sustainable BioCNG to fulfil gas and energy demands in the East Coast region of Sabah.

With the availability of BioCNG, the wide applications of BioCNG could potentially expand to applications in the transportation and manufacturing sector.” 

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