State error delays permitting for Montana refinery project

The Montana Department of Environmental Quality (DEQ) is reopening the public comment period for a preliminary decision to approve an air quality permit for Calumet Specialty Products Partners LP’s low-sulfur fuels expansion project at its 10,000-b/d refinery along the Missouri River in Great Falls, Mont., following a notification oversight by the state agency.

The decision to reopen the public comment period for the permit approval follows DEQ’s failure to comply with state law by neglecting to notify the public of its determination to approve the permit via advertisement in a newspaper of general circulation in the Great Falls area, according to a letter dated May 13 posted to DEQ’s web site.

DEQ issued its initial preliminary determination to approve the air permit for the expansion project on Mar. 18, with a final department decision and final permit originally scheduled for Apr. 25 and May 13, respectively, according to DEQ.

With the approval notice now made available in accordance with Montana’s statutory law, DEQ will accept public comments on its preliminary decision to approve the permit until June 12, the agency said.

While DEQ said it intends to issue a final decision on the permit following the conclusion of the public comment period, with the permit to become final after 15 days following the posting of that final decision, the agency did not disclose specific dates.

In February, Calumet said the $400 million Montana refinery project, which includes the installation of a 20,000 b/d crude unit and a 25,000 b/d hydrocracker, will double the plant’s capacity and should be completed during first-quarter 2016 (OGJ Online, Feb. 21, 2014).

The expansion project, which includes the construction of four processing units in total, is designed to increase the refinery’s low-sulfur fuels capacity to 30,000 b/d from its current 10,000 b/d, according to documents posted to DEQ’s web site.

Additionally, the refinery would increase its yields of distillates, kerosene, diesel, and asphalt.

The project is to include a crude unit to process heavy sour crudes, a mild hydrocracker unit (MHC) to convert gas oil to higher-value distillates, a hydrogen plant to support the MHC, and a fuel gas treatment unit to handle increased fuel gas production from the MHC, DEQ documents show.

In its first-quarter 2014 filing to the US Securities and Exchange Commission, dated May 9, Calumet said the expansion project at the Montana refinery would allow the company to capitalize on local access to cost-advantaged heavy Canadian Bow River crude oil for an incremental product production slate of gasoline, diesel, jet fuel, and diluent to be sold into regional markets.