Leak in steam-recovery system on Montana Renewables’ new hydrogen plant limits throughput

Calumet Specialty Products Partners provided an operational update Aug. 31 on its Montana Renewables LLC business.

Montana Renewables estimates adjusted EBITDA of $14.2 million in July, excluding contributions from the specialty-asphalt refinery.

Montana Renewables’ EBITDA was $1.23 per gallon overall and $1.35 per gallon on untreated feedstock, in line with guidance.

Untreated feedstock comprised 70 percent of the feed mix in July.

A leak in the steam-recovery system on the renewable hydrogen plant was identified earlier in August, which will limit throughput until repaired.

The repair is expected to be completed in late September.

Montana Renewables’ redundant hydrogen systems allow the plant to continue to run, albeit at reduced rates.

Montana Renewables presently estimates 8,000 to 8,500 barrels (336,000 to 357,000 gallons) per day of renewable product sales for the third quarter, and the plant is currently processing all untreated feed.

Pretreater debottlenecking continues, and in August the unit demonstrated the ability to process 11,000 barrels (462,000 gallons) per day of untreated feedstock.

Throughput rates at the legacy specialty-asphalt side of the operation remain at full levels.

“We are pleased with a very competitive July margin performance in line with our guidance of $1.25 to $1.45 per gallon,” said Bruce Fleming, CEO of Montana Renewables and executive vice president of corporate development. “Margin per gallon will continue to increase as the percentage of untreated feed grows and fixed costs spread over a larger throughput volume after the steam system is repaired.”

Calumet CEO Todd Borgmann said, “I’d like to thank our operations team for detecting an issue in the steam system, bringing it down safely, and quickly developing a repair plan that targets resuming full production by the end of this quarter. July’s financial performance is additional confirmation of Montana Renewables’ advantaged competitive position, and we remain on track strategically with our MaxSAF engineering, DOE-funding process, and ultimate monetization plans all progressing well.”