Sri Jelutung Palm Oil Mill, a wholly owned subsidiary of Tanah Makmur, has signed a memorandum of understanding (MoU) with Cenergi SEA-wholly owned subsidiary Metro Havana for the development of a biogas plant in Malaysia.

The biogas plant is planned to be built adjacent to the existing palm oil mill plant at Sri Jelutung in Pekan, Pahang, which is being revamped from 30mt/hr to 45mt/hr, reports The Sun Daily.

The new biogas plant is in line with a new regulation imposed by the Malaysian Palm Oil Mill Board, Tanah Makmur said in a filing with Bursa Malaysia.

As per regulation, any existing palm oil mill upgrade requires the company to obtain a biogas plant in order to alleviate the green house gases effect.

The company said: "Cenergi SEA (a wholly owned subsidiary company of Khazanah Nasional Bhd) has a track record of running biogas plant.

"The methane gas collected from the effluent pond will be the fuel to generate electricity. The said plant will generate 1.5 Mw per hour of electricity which will be sold to Tenaga Nasional Bhd under Sustainable Energy Development Authority (SEDA) Fit-in-Tariff."