Calumet making ‘excellent progress’ on Great Falls renewable diesel project

Calumet Specialty Products Partners LP provided an update on its hydrocracker conversion project to produce renewable diesel in Great Falls, Montana, in its second-quarter financial report and during a call with shareholders and the media. The company reported that it is making “excellent progress” on the project, with all cost, supplier and schedule objectives on target.

“We still plan to be producing renewable diesel after the plantwide turnaround next April,” said Calumet CEO Steve Mawer in a second-quarter earnings report. “We have passed another Front-End Loading gate as well as an external readiness review of our project. The relative simplicity of our project and the top tier metallurgy in the existing oversized hydrocracker continue to reinforce why this is a leading conversion project. Our near-term product marketing focus on the Pacific Northwest continues to advance, and we eagerly await all of Canada's transition to low-carbon fuels beginning in 2023. Our location, a hundred miles from the U.S.-Canada border, would make us a preferred supplier. Similarly, startup feedstock supply contracting is underway, and we continue to gain confidence that millions of acres of temperate oilseed farmland in our backyard will shortly receive regulatory approval to enter the renewable diesel feedstock supply picture. Finally, feedback from potential partners during diligence is that we have an incredibly compelling value proposition, and that the opportunity is as unique as we have believed. We look forward to sharing more information as we finalize negotiations."

On a call to discuss financials, Mawer added that the company has pushed forward a fluid catalytic cracking (FCC) unit turnaround in Great Falls to this fall from the previously scheduled time next spring to reduce the execution complexity of the hydrocracker conversion coupled with the sitewide refinery turnaround next spring.

He said Calumet has secured a fixed-cost EPC contractor for a green hydrogen plant to help assure a lower carbon-intensity fuel. The plant will recycle some of the lighter ends of tallow and vegetable oil processing for use in hydrogen production.

Mawer said Calumet has begun signing initial feedstock agreements for technical tallow and soybean oil. He said the company supports the comprehensive, bipartisan U.S. Senate effort to have EPA approve the pending canola pathway for renewable diesel. “We see its inclusion as inevitable,” Mawer said. Great Falls’ proximity to vast amounts of canola in the Northern Plains give it an advantage over its competitors, he added, which are farther away from the growth centers of this specific, high-volume, high-oil feedstock.

The feedstock strategy of Calumet, Mawer said, is local gathering and local supply of oils from camelina, canola and mustard. “These literally grow in our backyard,” he said. "Once we have our pretreatment unit, which is on deck for a late-2022 commissioning, we can run any feedstock.” This, Mawer said, will make Calumet’s Great Falls, Montana, project one of the “most feedstock-advantaged" renewable diesel production facilities in North America.

In May, the company laid out its three-phase strategy for renewable diesel production, starting with the spring 2022 initial hydrocracker conversion that will allow the unit to process 77 million gallons of renewable diesel per year. The second and third phases involve increasing renewable diesel processing capability and installing a pretreatment unit.

Mawer said funding for the project could be available from multiple sources, but he added that Calumet wouldn’t announce from where funding would originate until the company’s ready. “Our metal is at the heart of why we believe this is arguably the best renewable diesel conversion project in North America and, as shown before, it has the lowest capex per barrel of any announced project,” he said.

For information on the company’s second-quarter financials, click here.