Representatives of Calumet Specialty Products Partners L.P. discussed the company’s plan to produce renewable diesel at its existing petroleum refinery in Great Falls, Montana, during a fourth quarter earnings call on March 3.

Calumet initially announced the planned conversion project in February, noting the company expects that its oversized hydrocracker built in 2016 can be reconfigured to process 10,000 to 10,000 barrels per day of renewable feedstock.

During the earnings call, Steve Mawer, CEO of Calumet, explained that the company recently completed a strategic review of the Great Falls refinery. The company considered selling the facility, expanding the facility, or adding renewable feedstocks. The course of action Calumet has chosen includes elements of all three alternatives, Mawer said.

The company plans to complete the renewables conversion with the support of an equity investor and will also expand the small legacy refinery that remains after converting the hydrocracker to renewables, he added.

“We see three very compelling reasons for admitting a partner,” Mawer said. “First, the renewable diesel project depends on government regulated markets and therefore, carries a higher uncertainty than other projects available to the company. A strategic partner who is already pursuing renewable diesel supply would be prepared to manage that risk. We, on the other hand, want to focus our capital investment on specialties businesses. Second, a partner who was already pursuing renewable diesel supply we will see our Montana project the same way we do. It’s the lowest capital cost per barrel of any industry announcement to date, in our opinion. And third, the renewable diesel business is in an up cycle, while refining in 2020 is arguably bottom of cycle. It’s the right time for the pivot, especially because we can straddle the energy transition with our dual train moving faster given the infrastructure in place.”

Bruce Fleming, executive vice president of Montana renewables and corporate development at Calumet, said the company plans to begin processing renewable feedstocks at the Great Falls facility by early next year, with full capacity reached within the following 12 months.