Montana Renewables LLC, a subsidiary of Calumet Inc., has revised its sustainable aviation fuel (SAF) expansion project at its renewable fuels plant in Great Falls, Montana, significantly reducing the capital required for the programme, Oil & Gas Journal reported.
The company now estimates remaining expansion capital at $137 million, compared with about $1.2 billion envisaged under the original Phase 2 MaxSAF project, Calumet said in a September 1 release.
Under the revised plan, Montana Renewables will repurpose existing equipment from the adjacent Calumet Montana Refining (CMR) asphalt plant. The equipment, which will be transferred to Montana Renewables under a long-term lease, includes a hydrotreater, hydrogen plant and naphtha splitter.
The transferred hydrotreater will be integrated into a proprietary dual-reactor configuration at the renewable fuels facility. According to Calumet, the second reactor will operate in a “polishing” service instead of conventional “cracking” service, a configuration expected to improve SAF yields, reduce by-product formation and limit yield losses.
Additional modular equipment, including a third renewable fuels reactor currently located offsite, could enable production capacity to increase beyond 200 million gallons per year.
The revised expansion consists of six separate projects, each aimed at addressing specific operating constraints and providing a shorter payback period rather than relying on a single large-scale construction project.
Montana Renewables currently produces SAF at an estimated rate of 60 million gallons per year following constraint-removal work completed during a spring 2026 turnaround.
Calumet expects SAF production to exceed 80 million gallons per year by the end of 2026, surpass 120 million gallons per year by spring 2027 and reach around 200 million gallons per year by the end of 2028.
The expansion is also expected to recover around 20 million gallons per year of renewable propane and butane that were previously used as fuel gas. The project will improve renewable naphtha yields and reduce unit operating costs through higher throughput and lower water consumption.
Once expanded, the renewable fuels facility is expected to consume around 2 billion pounds of ranch- and farm-based feedstocks annually to produce renewable jet fuel, diesel and gasoline.
Equipment tie-ins are scheduled to be completed during a fourth-quarter 2026 turnaround. Calumet said CMR will continue producing retail asphalt and retain its workforce, while the two facilities will share certain site infrastructure and other costs following the expansion.
DOE financing revised
The revised MaxSAF programme follows an amendment to the loan guarantee agreement between Montana Renewables and the US Department of Energy (DOE), originally executed in January 2025.
Under the amended agreement, the DOE’s Phase 2 funding commitment has been reduced to a final draw of $34 million, compared with up to $658 million under the original arrangement. Montana Renewables expects to finance the remaining expansion costs through retained earnings.
The revised structure does not require third-party equity, which Calumet said would avoid additional dilution and maintain a simpler capital structure.
The first DOE tranche of $782 million was funded in February 2025 and was used to recapitalise Montana Renewables and cover eligible previously incurred expenses. Calumet also invested $150 million in equity using cash on hand.
The final $34 million DOE draw remains subject to commercial, technical and legal conditions. Calumet expects retained earnings generated during construction to supplement the DOE funding and keep debt below 55% of eligible project spending.
The loan retains a 15-year tenor and an annual interest rate based on the US Treasury rate plus 3/8%. Principal and interest payments remain deferred until MaxSAF is commissioned.
The first debt-service payment remains scheduled for March 2029, with the loan maturing in December 2039.
