Three business and residential premises were raided in the south Armagh village by the PSNI and HMRC on Wednesday morning, amid a series of searches in Northern Ireland and the Republic of Ireland.
Officers removed fuel tanks and uplifted records after executing warrants to search the buildings as part of evidence gathering for a financial investigation led by the Republic's Criminal Assets Bureau.
The plant has been linked to a Co Louth crime gang.
Meanwhile a further 40,000 litres of fuel and 16,000 litres of toxic waste were at found at an oil laundry in Castleblayney, Co Monaghan.
Authorities said the facility is capable of laundering 10m litres per year with a potential loss to the Exchequer of €5.5m.
More than 200 officers from An Garda Síochána and around 100 personel from NI have been involved in the operation, which is based in the south but stretches into the north.
They were searching for evidence related to criminal activity and assets suspected of being derived from criminal activity.
Seven houses, 10 businesses and two outhouses were searched across the south as part of Operation Loft.
Louth, Monaghan, Dublin, Kildare, Waterford, Offaly, Roscommon, Westmeath, Meath and Tipperary were targeted.
More than 100 police officers from specialist teams within the PSNI alongside officers from Her Majesty's Revenue Customs were involved on the NI side of the border.
Cross border co-operation ensures we are targeting those individuals or groups who think they can use the border as a way to commit crime or hide criminal proceeds and avoid detection.
John Whiting, Assistant Director of Criminal Investigation, HMRC
A large quantity of cash was discovered at two properties in the Republic. Business records and computers were also seized and will be forensically examined.
The CAB has also frozen more than 25 bank accounts thought to be linked to the operation.
They are being supported by the Emergency Response Unit, the Garda Air Support Unit and the Air Corps, together with Garda Personnel from the Division of Louth.
A spokesman from An Garda Síochána said: "This illegal activity has knock on effects on legitimate businesses as well as on unsuspecting customers who have very often experienced damage to the fuel system of their vehicles (from laundered diesel) or poor return per litre of petrol.
"The objectives of the operation are to seize evidence of assets deriving from oil fraud and money laundering, seize and dismantle illegal oil operations, seize cash or other assets including vehicles used in the criminal activity and to freeze bank accounts."
SDLP policing spokesperson Conall McDevitt has praised the police operation against serious and organised crime.
"I welcome the cohesion and professionalism displayed by the Garda and PSNI during a major cross-border operation against serious and organised crime today.
"The success of the operation is a credit to those officers involved. A great deal of planning must have gone into the operation which was carried out in an effective and integrated manner," he continued.
"It is essential that the Garda and PSNI are given our full support as they attempt to tackle the challenges of illegal fuel laundering and organised crime across the Island.
"Fuel launderers who make millions from this trade and often use the border to facilitate their illegal activity are hurting those people throughout the country who make an honest living," the South Belfast MLA concluded.
North Antrim MP Ian Paisley questioned the lack of arrests arising out of the operation.
"The fact that no arrests whatsoever have been made is both a startling and suspicious statistic," said the DUP member.
"How is it possible, that for an operation involving 400 staff on both sides of the border, that no arrests have been made? We're talking about 19 raids throughout 10 Irish counties. For there to have been not one single arrest is a complete embarrassment."
Meanwhile customs officials in the Republic of Ireland warned drivers of the dangers posed to their vehicles by using laundered fuel.
A statement said: "It also takes much needed funds from the Exchequer; hurts legitimate trade and of course it is funding criminal activity."
They added that investigations are ongoing.