Calumet’s Montana Renewables subsidiary has redesigned its MaxSAF expansion to target approximately 200 million gallons of annual sustainable aviation fuel production by the end of 2028 while reducing remaining project capital requirements to $137 million from the approximately $1.2 billion contemplated under the original Phase 2 plan.
The dramatic cost reduction is being achieved primarily by repurposing installed refining equipment from the neighboring Calumet Montana Refining facility rather than constructing a substantially new standalone expansion.
Montana Renewables also expects total renewable product sales capacity to rise approximately 40% to 17,000 barrels per day.
The lower capital requirement has resulted in an amended U.S. Department of Energy loan guarantee agreement.
Phase 2 DOE funding has been reduced from as much as $658 million to one final expected draw of $34 million. Montana Renewables plans to finance the remaining expansion using internally generated earnings rather than third-party equity, avoiding dilution.
The project will repurpose a hydrotreater, hydrogen plant and naphtha splitter from the adjacent refinery under a long-term lease.
The hydrotreater will form part of a dual-reactor configuration designed to improve sustainable aviation fuel yields while reducing byproduct production and associated yield losses.
Instead of one large construction program, Montana Renewables has divided the expansion into six smaller projects.
The plant is currently operating at an approximately 60 million gallon annual SAF run rate.
Management expects that figure to exceed 80 million gallons by the end of 2026, surpass 120 million gallons by spring 2027 and reach approximately 200 million gallons by the end of 2028.
The plan is also expected to recover about 20 million gallons annually of renewable propane and butane that had previously been consumed as fuel gas.
Calumet Montana Refining will continue producing retail asphalt and retain all employees.
Before transitioning equipment, the refinery is expected to generate approximately $50 million of EBITDA under current refining-margin assumptions.
The original DOE facility included a first $782 million tranche funded in February 2025. Following the amendment, only the final $34 million draw remains available, subject to applicable conditions.
KEY QUOTES:
“Our amended agreement with the DOE facilitates innovative technology and domestic energy security at a fraction of the original cost.”
Todd Borgmann, Chief Executive Officer Of Calumet
“They developed a project that captures approximately 70% of the originally expected benefit while spending only 15% of the originally expected Phase 2 capital.”
Todd Borgmann, Chief Executive Officer Of Calumet
