Montana Renewables begins operations at renewable diesel, SAF refinery in Great Falls
Updated: Nov 14, 2022
Calumet Specialty Products Partners announced Nov. 7 that its partial refinery-conversion project to produce renewable diesel and sustainable aviation fuel (SAF), Montana Renewables LLC in Great Falls, has begun operations. Mechanical completion of the project was achieved in October.
The announcement was part of a press release in which the company shared the closing of two transactions that together fund the working-capital needs of Montana Renewables.
“Now that Montana Renewables has commenced operations, these transactions ensure that our working capital needs are met going forward,” said Bruce Fleming, executive vice president of Montana Renewables. “Third-party inventory financing has been in the Montana Renewables plan since day one, and we are pleased to execute on the plan as we launch operations.”
The transactions include a supply and offtake agreement with Macquarie Commodities and Global Markets, which provides inventory monetization for renewable feedstocks and products, as well as intermediation services connected with the purchase of renewable feedstocks, the company stated.
Simultaneously, a $90 million asset-backed loan revolving-credit facility was executed with Wells Fargo Bank, secured by accounts receivables and open blenders tax credit refunds.
According to information provided during Calumet’s third-quarter earnings call and investor presentation, refinery assets have been completely separated into a 12,000-barrel-per-day (bpd) crude-oil refinery and 12,000 bpd renewables.
For renewables, this breaks down to approximately 135 million gallons per year (mgy) of renewable diesel capacity, 30 mgy of SAF capacity and 15 mgy of renewable naphtha capacity.
The company has secured an SAF offtake agreement with a blue-chip offtaker for 30 mgy and is pivoting its production plans to manufacture greater volumes of SAF.
Calumet stated that by the first quarter of next year, it will be the largest SAF producer in North America.
SAF production for 2023-’24 is expected to expand to 60 mgy, with the potential to produce a maximum of up to 230 mgy of SAF by 2024.
The renewable hydrogen unit will be online in December, and the feedstock-pretreatment unit will be operational after that, later this winter.
Calumet currently has $50 million in feedstock inventory on site. It stated that the companies that are currently providing treated feedstock will provide untreated feedstock once the pretreatment unit is operational.
“Our feedstock strategy is to gather locally, and we have soy, canola, distillers corn oil and tallow inventoried,” Fleming told Biobased Diesel Daily. He noted that while Montana produces these crops, the state does not crush the seeds nor render or recycle animal byproducts. “Our long-term vision is that agribusiness will connect the farm, ranch and us, by building crusher and/or meat packing in Montana,” he added. “Camelina is not commercially available in large quantities, but it will be.”