US DOE to support Montana Renewables’ Great Falls SAF expansion

HOUSTON, Oct. 18— The US Department of Energy (DOE) loan programs office has awarded Calumet Inc. subsidiary Montana Renewables LLC (MRL) a conditional loan guarantee of up to $1.44 billion to fund an expansion of the operator’s renewable fuels manufacturing plant in Great Falls, Mont.

Pending satisfaction of certain technical, legal, environmental, and financial conditions, DOE’s conditional funding commitment—if approved—would support launch of construction on works related to MRL’s proposed MaxSAF expansion to boost the Great Falls biorefinery’s current SAF production by more than 700% to about 300 million gal/year, MRL and Calumet said.

Combined SAF-renewable diesel production at Great Falls following completion of the MaxSAF expansion would amount to 330 million gal/year, according to MRL.

The Great Falls plant currently produces 15,000 b/d and 30,000 gal/year of renewable diesel and SAF, respectively, according to the operator’s website.

With engineering on the project already under way, the MaxSAF expansion would involve a series of works to increase production capacities at Great Falls (OGJ Online, July 10, 2023).

Upon announcing award of DOE’s potential funding award on Oct. 16, MRL said it expects to execute a sequence of discrete individual projects as part of the expansion, including:

• Adding a second renewable fuels reactor to enable about half of the 300-million gal/year SAF capability to be online by 2026.
• Debottlenecking the biorefinery’s existing renewable fuels and feedstock pretreatment units.
• Installing SAF blending and logistics assets.
• Increasing the manufacturing site’s renewable hydrogen production.
• Adding cogeneration for renewable electricity and steam.
• Installing on-site water treatment and recycling capabilities.
• Implementing other unidentified enhancements at the site.

Conditional loan framework

DOE’s conditional financial commitment to the MaxSAF expansion at Great Falls contemplates a loan guarantee structured in two tranches.

Anticipated to close during fourth-quarter 2024, the first tranche of about $778 million is expected to close in the fourth quarter of this year, with the balance of the loan guarantee to be disbursed through a delayed draw—or revolving credit—facility from start of construction in 2025 through the project’s scheduled completion in 2028, MRL said.

If finalized, the loan will have a 15-year tenor and an annual interest rate at the US Treasury rate plus 3/8% when issued. Servicing of principal and interest would be deferred until MRL commissions the MaxSAF expansion, according to the operator.

The proposed financing agreement also includes a $150-million equity investment to be made at initial closing. MRL said its retained earnings will supplement DOE funds to maintain a 55-45 debt- to-equity ratio during the MaxSAF construction sequence.