Calumet to use soybean oil for Montana renewable diesel production next year
Updated: May 12, 2021
Calumet Specialty Products provided an update during a first-quarter earnings call May 7 on its project to convert a Great Falls, Montana, petroleum refinery over to renewable diesel production.
Steve Mawer, CEO, said progress on the project since it was first announced earlier this year has been “more than satisfying.” The company is in the process of “de-risking and beginning execution of the project,” and that partner discussions have been “productive.”
Todd Borgmann, chief financial officer, provided a three-phase approach to the conversion. Since the oversized hydrocracker was already updated in 2015 with 317L stainless steel, Borgmann said the unit “already contains the metal to process highly acidic renewable feedstock.”
Phase 1 includes changing out the hydrocracker catalyst in April 2022 during a planned refinery-wide turnaround, converting tankage and expanding dewatering capabilities in order to be capable of processing nearly 77 million gallons per year (mgy) of renewable diesel by mid-2022.
“That will get us to market quickly,” Borgmann said. “After that is completed, the hydrocracker will still be way under-utilized.”
In order to avoid maxing out the existing hydrogen plant, and to produce greater volumes of renewable diesel, Phase 2 involves constructing a renewable hydrogen facility that will generate more of the gas to increase manufacturing capabilities to more than 153 mgy, while driving down the fuel’s carbon intensity.
Phase 3 is adding a feedstock pretreatment unit. Once the hydrocracker is converted next spring, the company plans to process soybean oil exclusively.
“That’s the fastest, lowest-risk track,” Borgmann said, adding that discussions with suppliers are ongoing and being evaluated.
But adding a pretreatment unit will allow for flexibility and open up more global feedstock purchase opportunities.
Calumet has received significant interest in those seeking to partner with the company on this project, said Mawer, explaining that the company is not putting all its cards on the table yet.
“Playing the game with all our cards face up on the table is not medium-term value maximizing,” he said. “This is much more like a game of gin rummy than bridge.”