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Montana Renewables Announces Closing of $1.44 Billion DOE Loan Facility for Renewable Fuels and Biomass Energy Facility

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Calumet (NASDAQ: CLMT) announced the closing of a $1.44 billion guaranteed loan facility with the U.S. Department of Energy for its Montana Renewables subsidiary. The loan will fund the construction and expansion of their renewable fuels facility, positioning it as one of the largest Sustainable Aviation Fuel (SAF) producers globally.

The expansion will increase annual production capacity to 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel. Initial loan proceeds of $782 million are expected this month, with Calumet making an additional $150 million equity investment. The loan has a 15-year tenor at U.S. Treasury rate plus 3/8%.

The project includes a second renewable fuels reactor, debottlenecking existing units, SAF blending assets, increased hydrogen production, and water treatment facilities. The expansion will double seed oils and tallow purchases from 1.5 to 3 billion pounds annually and is expected to create 450 construction jobs and 40 operations jobs.

Calumet (NASDAQ: CLMT) ha annunciato la chiusura di un prestito garantito da 1,44 miliardi di dollari con il Dipartimento dell'Energia degli Stati Uniti per la sua sussidiaria Montana Renewables. Il prestito finanzierà la costruzione e l'espansione della loro struttura per i carburanti rinnovabili, posizionandola come uno dei maggiori produttori di Sustainable Aviation Fuel (SAF) a livello globale.

L'espansione aumenterà la capacità produttiva annuale a 300 milioni di galloni di SAF e 330 milioni di galloni di SAF e diesel rinnovabile combinati. Si prevede di ricevere i proventi iniziali del prestito di 782 milioni di dollari questo mese, con Calumet che effettuerà un ulteriore investimento di capitale di 150 milioni di dollari. Il prestito ha una durata di 15 anni con un tasso pari a quello del Tesoro USA più 3/8%.

Il progetto include un secondo reattore per i carburanti rinnovabili, l'ottimizzazione delle unità esistenti, impianti di miscelazione SAF, aumento della produzione di idrogeno e impianti di trattamento delle acque. L'espansione raddoppierà gli acquisti di oli vegetali e sego da 1,5 a 3 miliardi di libbre all'anno e si prevede di creare 450 posti di lavoro nella costruzione e 40 posti di lavoro nelle operazioni.

Calumet (NASDAQ: CLMT) anunció el cierre de un préstamo garantizado de 1.44 mil millones de dólares con el Departamento de Energía de los EE. UU. para su subsidiaria Montana Renewables. El préstamo financiará la construcción y expansión de su instalación de combustibles renovables, posicionándola como uno de los mayores productores de Sustainable Aviation Fuel (SAF) a nivel mundial.

La expansión aumentará la capacidad de producción anual a 300 millones de galones de SAF y 330 millones de galones de SAF y diésel renovable combinado. Se espera que los ingresos iniciales del préstamo de 782 millones de dólares lleguen este mes, con Calumet realizando una inversión adicional de capital de 150 millones de dólares. El préstamo tiene un plazo de 15 años con una tasa igual a la del Tesoro de EE. UU. más 3/8%.

El proyecto incluye un segundo reactor de combustibles renovables, la optimización de las unidades existentes, activos de mezcla de SAF, un aumento en la producción de hidrógeno y plantas de tratamiento de agua. Se espera que la expansión duplique las compras de aceites de semillas y sebo de 1.5 a 3 mil millones de libras anuales y se estima que creará 450 empleos en la construcción y 40 empleos operativos.

칼루메트 (NASDAQ: CLMT)는 몬태나 재생 에너지 자회사를 위해 미국 에너지부와 14억 4천만 달러 보증 대출 시설을 마감했다고 발표했습니다. 이 대출은 재생 연료 시설의 건설 및 확장을 자금을 지원하여 이를 세계에서 가장 큰 지속 가능한 항공 연료(SAF) 생산업체 중 하나로 자리잡게 할 것입니다.

확장을 통해 연간 생산 용량은 3억 갤론의 SAF와 3억 3천만 갤론의 SAF 및 재생 디젤을 포함하여 증가합니다. 최초의 대출 수익인 7억 8천2백만 달러는 이번 달에 예상되며, 칼루메트는 추가로 1억 5천만 달러의 지분 투자를 할 예정입니다. 이 대출은 15년 만기이며 미국 재무부 금리에 3/8%를 추가한 금립니다.

이 프로젝트에는 두 번째 재생 연료 반응기, 기존 유닛의 병목 해소, SAF 혼합 자산, 증가된 수소 생산 및 수처리 시설이 포함됩니다. 확장을 통해 씨앗 오일과 동물성 지방 구매가 연간 15억 파운드에서 30억 파운드로 두 배 증가하고, 450개의 건설 일자리와 40개의 운영 일자리가 창출될 것으로 예상됩니다.

Calumet (NASDAQ: CLMT) a annoncé la clôture d'un prêt garanti de 1,44 milliard de dollars avec le Département de l'Énergie des États-Unis pour sa filiale Montana Renewables. Le prêt financera la construction et l'expansion de leur installation de carburants renouvelables, la positionnant comme l'un des plus grands producteurs de Sustainable Aviation Fuel (SAF) au niveau mondial.

L'expansion augmentera la capacité de production annuelle à 300 millions de gallons de SAF et 330 millions de gallons de SAF et de diesel renouvelable combiné. Les produits initiaux du prêt de 782 millions de dollars sont attendus ce mois-ci, Calumet réalisant un investissement supplémentaire en capital de 150 millions de dollars. Le prêt a une durée de 15 ans à un taux égal à celui du Trésor américain plus 3/8%.

Le projet inclut un second réacteur de combustibles renouvelables, l'optimisation des unités existantes, des actifs de mélange SAF, une augmentation de la production d'hydrogène et des installations de traitement de l'eau. L'expansion doubliera les achats d'huiles de graines et de suif de 1,5 à 3 milliards de livres par an et devrait créer 450 emplois dans la construction et 40 emplois opérationnels.

Calumet (NASDAQ: CLMT) hat den Abschluss eines garantierten Darlehens in Höhe von 1,44 Milliarden US-Dollar mit dem US-Energieministerium für ihre Tochtergesellschaft Montana Renewables bekannt gegeben. Das Darlehen wird den Bau und die Erweiterung ihrer Einrichtung für erneuerbare Kraftstoffe finanzieren und sie als einen der größten Produzenten von Sustainable Aviation Fuel (SAF) weltweit positionieren.

Die Erweiterung wird die jährliche Produktionskapazität auf 300 Millionen Gallonen SAF und 330 Millionen Gallonen kombinierte SAF- und erneuerbare Diesel erhöhen. Die anfänglichen Darlehensmittel in Höhe von 782 Millionen US-Dollar werden für diesen Monat erwartet, wobei Calumet zusätzlich 150 Millionen US-Dollar als Eigenkapitalinvestition bereitstellt. Das Darlehen hat eine Laufzeit von 15 Jahren zu dem Zinssatz des US-Schatzamtes zuzüglich 3/8%.

Das Projekt umfasst einen zweiten Reaktor für erneuerbare Kraftstoffe, Optimierungen bestehender Anlagen, SAF-Mischanlagen, gesteigerte Wasserstoffproduktion und Wasseraufbereitungsanlagen. Die Erweiterung wird die Einkäufe von Saatölen und Talg von 1,5 auf 3 Milliarden Pfund pro Jahr verdoppeln und voraussichtlich 450 Bauarbeitsplätze sowie 40 Arbeitsplätze in der Betriebsführung schaffen.

Positive
  • Secured $1.44 billion DOE loan facility with favorable terms (Treasury rate + 0.375%)
  • Expansion to increase SAF production capacity to 300 million gallons annually
  • Initial $782 million funding expected immediately
  • Company contributing $150 million in equity investment
  • Project expected to create 450 construction and 40 permanent jobs
Negative
  • Significant increase in debt burden
  • Project completion extends to 2028, presenting execution risks
  • Loan disbursements subject to various conditions precedent

Insights

The $1.44 billion DOE loan facility for Montana Renewables represents a transformative development in the renewable fuels sector. The financing structure is remarkably favorable, featuring a 15-year tenor with Treasury rate plus 0.375% interest - substantially below market rates. The initial $782 million tranche combined with Calumet's $150 million equity investment provides immediate capital deployment capability.

The project economics are compelling: debt servicing deferral until commissioning reduces early-stage financial burden, while the 55% debt-to-capitalization ratio maintains a conservative leverage profile. The expanded 330 million gallon annual production capacity positions Montana Renewables as a dominant player in the rapidly growing SAF market.

For investors, this represents significant de-risking of Calumet's renewable fuels strategy through government backing. The project's scale and favorable financing terms should drive substantial operating leverage and cash flow generation once fully operational in 2028.

The doubling of feedstock requirements from 1.5 billion to 3 billion pounds annually will create significant ripple effects across agricultural supply chains. This unprecedented demand surge for seed oils and tallow will likely tighten regional commodity markets and potentially drive price premiums for local producers.

The project's integration with local agricultural infrastructure and development of the SAF Hub concept mirrors successful models seen in Minnesota, suggesting strong potential for sustained economic multiplier effects. The scale of feedstock procurement positions Montana Renewables as a major price-setter in regional agricultural markets.

For context, this volume represents approximately 4% of total U.S. soybean oil production, making it a significant enough player to influence broader commodity market dynamics.

The project's infrastructure development encompasses critical components beyond basic production facilities - notably renewable hydrogen production, cogeneration capabilities and water treatment systems. This integrated approach enhances operational resilience and efficiency while reducing external dependency.

The economic impact projections from the University of Montana study, indicating support for 4,400 residents by 2028, are well-grounded given the project's comprehensive scope. The creation of 450 construction jobs and 40 permanent operational positions understates the broader economic catalyst effect through supply chain development and auxiliary service requirements.

The strategic positioning in the Pacific Northwest, coupled with planned logistics assets, creates a defensible competitive advantage in serving West Coast aviation markets where SAF demand is highest.

  • Initial loan proceeds of $782 million expected to be funded this month and balance of proceeds funded through planned construction period
  • DOE loan guarantee facilitates expansion of Sustainable Aviation Fuel capacity to 300 million gallons per year

INDIANAPOLIS, Jan. 10, 2025 /PRNewswire/ -- Calumet, Inc. (NASDAQ: CLMT) ("Calumet," "we," "our" or "us") announced today the closing of a $1.44 billion guaranteed loan facility with the U.S. Department of Energy ("DOE") Loan Programs Office ("LPO"). The loan will fund the construction and expansion of the renewable fuels facility owned by Montana Renewables, LLC ("Montana Renewables" or "MRL"), an unrestricted subsidiary of Calumet.

The expansion positions Montana Renewables as one of the largest Sustainable Aviation Fuel ("SAF") producers globally, enabling an increase in annual production capacity to approximately 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel ("RD"). The planned expansion includes several key components: a second renewable fuels reactor (allowing approximately half of the 300-million-gallon SAF capability to be online by 2026), debottlenecking of existing units, installation of SAF blending and logistics assets, increased renewable hydrogen production, cogeneration for renewable electricity and steam, and on-site water treatment and recycling capabilities.

"This is essentially the largest agricultural investment in Montana history and will double our purchases of seed oils and tallow from approximately 1.5 billion pounds per year today to 3 billion pounds per year post expansion. This is possible through the strong support and partnership of DOE and follows over two years of detailed due diligence," said Bruce Fleming, CEO of Montana Renewables. "Our MaxSAF expansion drives regional economic development by creating jobs, supporting the broader agricultural industry, and positioning the State of Montana as a global leader in renewable fuels in a practical and highly economic way with technology that we have developed and derisked here in the United States."

"This investment is a pivotal catalyst for Calumet," said Todd Borgmann, CEO of Calumet. "Following our conversion to a C-Corporation, we emphasized the importance of the DOE loan as the next major step in Calumet's vision, and achieving that milestone is a tremendous accomplishment. As Montana Renewables grows from a first mover and innovator in SAF to become one of the largest independent producers in the world, this business continues to competitively position itself for success, which is a critical piece of Calumet's strategy to deliver ongoing shareholder value."

Loan Guarantee Structure

The loan guarantee is structured to release a first tranche of approximately $782 million to fund eligible expenses previously incurred by MRL. Simultaneous with the expected first tranche funding, Calumet expects to make an additional $150 million equity investment with funds that it currently holds. The balance of the guaranteed loan proceeds is held in a delayed draw construction facility, and MRL expects this second tranche to be disbursed during construction beginning in 2025 through the anticipated completion of the MaxSAF project in 2028. Disbursements under the guaranteed loan facility are subject to the satisfaction of certain commercial, technical, and legal conditions precedent. During construction, retained earnings from MRL are expected to supplement DOE funds to maintain debt at 55% of capitalization during the MaxSAF construction sequence. The loan has a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus 3/8%. Servicing of principal and interest will be deferred until MaxSAF™ is commissioned.

Regional Development

An economic impact study1 produced by the University of Montana Bureau of Business and Economic Research (BBER) measured the substantial benefit to Montana in the form of jobs, income, government revenues, economic output and population. For example, by 2028, the economic footprint of the Great Falls site is expected to support a population of 4,400 Montanans, consisting primarily of working-aged families and their children.

MRL expects the expansion to catalyze additional regional development, particularly for renewable feedstocks sourced from farms and ranches. By driving local infrastructure development in transportation, agricultural and energy related businesses similar to the Minnesota SAF Hub, MRL will create a large-scale, end-to-end SAF industry comprised of public and private partners in Montana and the Pacific Northwest. 

The MRL expansion is expected to create 450 construction jobs and up to 40 operations jobs. 

About Montana Renewables
Montana Renewables is a leading renewable fuel company located in Great Falls, Montana. MRL produces Sustainable Aviation Fuel, Renewable Diesel, Renewable Hydrogen and Renewable Naphtha. As the largest SAF producer in North America (2024), MRL is dedicated to meeting the increasing demand for sustainable fuels and to supporting a greener future. As a Great Falls business leader, MRL offers high-paying jobs and career opportunities while supporting the local economy and contributing to the community's overall well-being. Pacific Northwest farm and ranch operations ultimately provide MRL with sustainable, renewable, low-carbon feedstocks and agricultural byproducts including tallow, distillers corn oil, canola oil, used cooking oil and camelina oil. These feedstocks are converted to renewable transportation fuels which have lower emissions compared to conventional fossil fuels. MRL is an unrestricted subsidiary of Calumet, Inc.

About Calumet
Calumet, Inc. (NASDAQ: CLMT) manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. Calumet is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America.

Cautionary Statement Regarding Forward-Looking Statements
Certain statements and information in this press release may constitute "forward-looking statements." The words "will," "may," "intend," "believe," "expect," "outlook," "forecast," "anticipate," "estimate," "continue," "plan," "should," "could," "would," or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. The statements discussed in this press release that are not purely historical data are forward-looking statements, including, but not limited to, the statements regarding (i) our expectations regarding the funding of the loan facility (the "DOE Facility") that MRL received from the DOE LPO, including the timing and intended use of borrowings under such facility, (ii) our expectation that the DOE Facility will enable MRL to complete the MaxSAF™ construction and that such project will be completed on time and on budget, (iii) our expectation regarding our business outlook and cash flows, including with respect to the Montana Renewables business, and (iv) our ability to meet our financial commitments, debt service obligations, debt instrument covenants, contingencies and anticipated capital expenditures. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause our actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but not limited to: the overall demand for renewable fuels, including SAF and RD; our ability to produce renewable fuel products that meet our customers' unique and precise specifications; the marketing of alternative and competing products; the impact of fluctuations and rapid increases or decreases in renewable fuel margins, including the resulting impact on our liquidity; our ability to comply with financial covenants contained in our debt instruments; labor relations; our access to capital to fund expansions, acquisitions and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit ratings and ability to receive open credit lines from our suppliers; demand for various feedstocks and resulting changes in pricing conditions; fluctuations in refinery capacity; our ability to access sufficient feedstocks; the effects of competition; continued creditworthiness of, and performance by, counterparties; the impact of current and future laws, rulings and governmental regulations shortages or cost increases of power supplies, natural gas, materials or labor; weather interference with business operations; administration changes in the federal government and potential legislative enactments and administrative actions; our ability to access the debt and equity markets; accidents or other unscheduled shutdowns; and general economic, market, business or political conditions, including inflationary pressures, instability in financial institutions, general economic slowdown or a recession, political tensions, conflicts and war (such as the ongoing conflicts in Ukraine and the Middle East and their regional and global ramifications).

For additional information regarding factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including the risk factors and other cautionary statements in the latest Annual Report on Form 10-K of Calumet Specialty Products Partners, L.P. (the "Partnership") and other filings with the SEC by Calumet, Inc. and the Partnership.

We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Certain public statements made by us and our representatives on the date hereof may also contain forward-looking statements, which are qualified in their entirety by the cautionary statements contained above.

1 https://www.bber.umt.edu/pubs/Econ/Calumet-Impact-Report.pdf 

Cision View original content:https://www.prnewswire.com/news-releases/montana-renewables-announces-closing-of-1-44-billion-doe-loan-facility-for-renewable-fuels-and-biomass-energy-facility-302348366.html

SOURCE Calumet, Inc.

FAQ

What is the size and purpose of CLMT's DOE loan facility?

The DOE loan facility is $1.44 billion and will fund the construction and expansion of Montana Renewables' renewable fuels facility to increase Sustainable Aviation Fuel production capacity to 300 million gallons annually.

When will CLMT receive the initial loan proceeds?

CLMT expects to receive the initial loan proceeds of $782 million in January 2024, with the remaining balance funded through the planned construction period until 2028.

What are the terms of CLMT's DOE loan facility?

The loan has a 15-year tenor with an annual interest rate at the U.S. Treasury rate plus 3/8%. Principal and interest payments are deferred until the MaxSAF project is commissioned.

How many jobs will CLMT's Montana Renewables expansion create?

The expansion is expected to create 450 construction jobs and up to 40 permanent operations jobs.

What is the production capacity increase for CLMT's Montana Renewables facility?

The expansion will increase production capacity to 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel annually.

Calumet, Inc.

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