Montana Renewables acquires 2nd reactor needed for SAF expansion in Great Falls

Photo: Montana Renewables

Calumet Specialty Products Partners LP provided a year-end operational update Dec. 29, including a project and business update at Montana Renewables and company-wide impact from the December arctic blast.

Separation of Montana Renewables and the Great Falls Specialty Asphalt refinery was completed during the fourth quarter with both businesses operating in their new services.

The 12,000-barrel-per-day (bpd) specialty asphalt refinery is presently running at nameplate capacity on Canadian heavy crude.

Montana Renewables commissioned its modified hydrocracker in renewable diesel service Nov. 5, then retrofitted additional winterization capability during the month of November.

The biorefinery generated a full month of on-spec renewable diesel production in December and commenced rail shipments late in the month after establishing product inventories.

Catalyst performance has been consistent and met the expected performance envelope provided by Topsoe, the company stated.

The current 6,000 bpd capacity will increase to 12,000 bpd with the sequential commissioning of the renewable hydrogen plant, sustainable aviation fuel (SAF) production and the feedstock-pretreatment system, which are expected online in that order in the first quarter of 2023.

Preliminary engineering and procurement are underway for the expected 2024 expansion, including an option to maximize SAF yield to 85 percent.

Montana Renewables recently acquired the second reactor needed for its maximum-SAF option, and while the company has not made a final installation decision, great interest from the existing Lazard process warranted the opportunistic reactor purchase. Calumet stated that this opportunity further cements its first-mover position in the rapidly evolving SAF market.

“Our strategy to retain a downsized crude-oil refinery while carving out Montana Renewables meant a higher degree of difficulty compared to simply converting a closed refinery,” said Bruce Fleming, executive vice president of Montana Renewables and corporate development. “Delivering an aggressive timeline, navigating two winter construction seasons, minimizing 2022 downtime for turnaround and carveout, building safely on an operating site, and moving quickly through commissioning all demonstrate the high capabilities of the Great Falls workforce. While not without setbacks, we are proud of the journey. Going forward, the full economic contribution of the specialty asphalt refinery will follow normal seasonal patterns, and Montana Renewables will reach steady-state earnings after the first quarter commissioning sequence is complete.”

Calumet’s specialty business has performed exceptionally well in 2022, the company stated, including throughput and profitability records across the system and at most individual plants. This performance was supported by exceptional execution of key turnarounds in Shreveport and Princeton and capital investments targeting reliability and deeper integration between assets, widening a key competitive advantage of this business.

In late December, Calumet’s production was impacted with nearly all units being either circulated or shut down during the extreme weather event. The Shreveport plant was hampered by a city-wide water crisis resulting in a lack of water systems necessary to restart the plant. Since then, city water has been restored, and it is currently in startup. All other plants are back up in production.

Demand in the specialty business continues to be healthy considering routine seasonal volume patterns. Calumet typically sees soft winter asphalt margins and it continues to experience strong specialty-product margins as the new year approaches.

“I’m extremely proud of our operating teams across the Calumet system,” said Todd Borgmann, CEO. “The recent arctic weather has challenged the industry, and Calumet is no different. While most families across our country were able to enjoy time off over the past couple weeks, many Calumet employees spent their holiday at our plants in extreme conditions ensuring that our business could be restored safely and quickly in order to meet customer needs with minimal disruption. I am continually grateful and impressed by the resolve of Calumet’s employees.”