Calumet: Montana Renewables Begins Shipping Renewable Diesel
by Erin Voegele (Biomass Magazine) Calumet Specialty Product Partners L.P. on Dec. 29 announced that its Montana Renewables biorefinery generated a full month of on-spec renewable diesel production in December and has commenced rail shipments of the product.
Montana Renewables commissioned its modified hydrocracker in renewable diesel service on Nov. 5 and retrofitted additional winterization capability during the remainder of the month. With the facility now operational, Calumet said catalyst performance has been consistent and met the expected performance envelope provided by Haldor Topsoe. The current 6,000-barrel-per-day capacity is expected to increase to 12,000 barrels per day with the sequential commissioning of renewable hydrogen, sustainable aviation fuel (SAF), and feedstock pre-treater, which are expected to come online in that order during the first quarter of 2023, according to the company.
Preliminary engineering and procurement is beginning for a planned expansion project in 2024, including an option that would maximize SAF yield to 85 percent. According to Calumet, Montana Renewables recently acquired the second reactor needed for its MAX 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. READ MORE
Calumet Montana oil refinery in Great Falls to become top US producer of sustainable jet fuel: Calumet Montana said that its refinery in Great Falls added nearly 150 jobs over the past six years. (Great Falls Tribune)
Montana Renewables appoints Citigroup lead underwriter in bond offering from Cascade County (Biobased Diesel Daily)
Calumet Reaches Key Application Milestone for Loan Guarantee from the U.S. Department of Energy (Calumet/PR Newswire)
Excerpt from Biobased Diesel Daily: “The cognitive dissidence, maybe, was that we had a bunch of conventional thinking from the analyst community,” says Bruce Fleming, executive vice president of Montana Renewables. He says coverage of Calumet’s plans, mostly from Wall Street types using conventional wisdom, came perhaps from a misunderstanding by analysts about this new market in which refinery assets are being repurposed. “We didn’t agree with it,” Fleming says. “We felt like a contrarian.”
What most of these critics didn’t know is that Calumet spent nearly two years studying the move prior to announcing its plans. One of the biggest questions facing Calumet was of feedstock—what will it use and where will the company get it?
“Energy commodities do not provide a springboard to become ag-commodities observers,” Fleming tells Biobased Diesel™. “People say, ‘There’s not enough feedstocks to go around.’ There are enormous quantities traded globally every day. A few refineries converting to produce renewable diesel are just a blip on the radar. The market is elastic. More acres can be planted, technologies can be deployed, farmers can obtain cash for cover crops. Camelina is going to be a poster child in our latitude, something farmers want to do—that’s a whole new factor. Conventional analysts missed all the responses. When there’s a shortage, prices rise and unexpected responses show up, and prices go back down.”
Ag commodities “think” and “behave” differently, Fleming says. “We did not claim to know anything about it,” he admits. “So, we went out and got people who did understand it.”
Calumet hired VEOS and StoneX Group. “They’ve been doing this for a really long time,” Fleming says. “We subsequently added a really qualified tallow trader too.”
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Canola from Canada and the upper Midwestern and Western U.S. “ships right past us to get anywhere,” Fleming says, adding that hydrotreated canola oil wasn’t approved by U.S. EPA under the Renewable Fuel Standard when Calumet began this journey—but it is now.
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Before Calumet ever considered renewable diesel production, its oversized hydrocracker was retrofitted with 317L stainless steel, which the company says is needed to process highly acidic renewable feedstock.
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The company also surrounded itself with qualified technology, equipment, and service companies. Burns & McDonnell was chosen as EPC contractor. Matrix Service was awarded the contract to build seven new storage tanks. Topsoe provided its well-known HydroFlex™ process technology. Technip Energies was retained to build a new green-hydrogen plant. And Applied Research Associates is providing the pretreatment unit.
Current Production, Future Plans
Montana Renewables began processing renewable diesel this fall. “After a year of investing in the conversion of our facility, today (Nov. 30) we are sending out our first railcars of renewable diesel fuel,” said Ron Colwell, general manager.
In November, the company had $50 million in feedstock inventory on site. “Our feedstock strategy is to gather locally, and we have soy, canola, distillers corn oil and tallow inventoried,” Fleming says. He notes 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 or meat packing in Montana,” he adds. “Camelina is not commercially available in large quantities, but it will be.” Montana Renewables has reserved land on its site in Great Falls to accommodate a crush plant, if a deal can be struck with the right co-op or company.
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The new hydrogen plant, the flowsheet for which Montana Renewables has filed for patent protection, will use ample off-gas supplies from renewable diesel processing to completely provide enough hydrogen for its needs and is targeted for completion in December. The pretreatment system is expected to come online after that, sometime late this winter.
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“We have three blue-chip customers,” Fleming says. “Phillips 66, Chevron, and the third is bigger than them. All three have contracted for as much renewable diesel as we can get them.”
The company has secured an SAF agreement with a blue-chip offtaker for 30 mgy and is pivoting its production plans to manufacture greater volumes of SAF. READ MORE
