Calumet: Montana Renewables operating at near capacity, work continues on proposed MaxSAF initiative
SOURCE: Calumet Specialty Products Partners L.P.
February 26, 2024
BY Erin Voegele
Calumet Specialty Products Partners L.P. released fourth quarter financial results on Feb. 23, announcing that Montana Renewables returned to normal operations in December following the replacement of a cracked steam drum and providing an update of the company’s proposed MaxSAF initiative.
Calumet in February 2021 first announced plans to produce renewable fuels at its existing refinery in Great Falls, Montana, by reconfiguring its oversized hydrocracker to process up to 15,000 barrels per day of renewable feedstocks, producing renewable diesel and sustainable aviation fuel (SAF). The facility began producing on-spec renewable diesel in 2022, with plant capacity at 6,000 barrels per day. The Montana Renewables facility commissioned renewable hydrogen, SAF and feedstock pretreatment systems in early 2023, boosting capacity to 12,000 barrels per day. Current SAF capacity in the range of 2,000 to 4,000 barrels per day, but Calumet is considering a move to what its calls MaxSAF, which would boost total capacity to 18,000 barrels per day of renewables, including 15,000 barrels per day of SAF.
Operations at the Montana Renewables facility were impacted last year by a crack found in the steam drum of the facility’s hydrogen plant. A replacement drum was installed in November. David Lunin, chief financial officer of Calumet, said repair work was completed during the fourth quarter, along with a turnaround and catalyst change the company pulled forward. The renewable diesel facility was completely shut down in November but was brought back online in early December and has been operating well since, he added. Montana Renewables is now operating a near capacity.
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Todd Borgmann, CEO of Calumet, provided an update on the company’s MaxSAF initiative during the company’s fourth quarter earnings call. He said the company has progressed engineering on MaxSAF, interviewed construction partners, and is eagerly awaiting feedback from the U.S. Department of Energy on a pending loan guarantee application. According to Borgmann, the process with the DOE continues to move well and the company is hopeful it will receive confirmatory feedback in the not-too-distant future that will allow it to officially launch the next phase of MaxSAF.
Calumet’s Montana Renewables segment reported a loss of $25.8 million of adjusted EBITDA during the fourth quarter, compared a $13.1 million loss during the same period of 2022. The company primarily attributed the reduction to reduced throughput and downtime at Montana Renewables due to the previously disclosed steam drum replacement that was completed during the period. The segment reported adjusted EBITDA of $30.2 million for the full year 2023, compared to $75.8 million in 2022.
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