Calumet spins off Montana renewable diesel projects into Montana Renewables

November 22, 2021 |

In Indiana, Calumet Specialty Products Partners, L.P. announced a series of strategic transactions in connection with its Renewable Diesel business. The transactions establish Montana Renewables, LLC as an unrestricted pure-play renewables subsidiary of Calumet. MRL has closed on a $300 million convertible debt investment from funds managed by Oaktree Capital Management, L.P. MRL has also closed on a $145 million preferred equity investment by Calumet. Calumet owns 100% of the equity of MRL.

Calumet’s operations in Montana now include two fully independent business lines: Renewables through MRL, and conventional Canadian crude refining through Calumet Montana Refining LLC. 

MRL will complete its in-flight capital projects and is expected to become one of the most advantaged renewable diesel producers in North America. MRL’s existing hydrocracker metallurgy of 317L stainless steel is well-suited for renewable feedstock processing; MRL’s unique renewable hydrogen project further lowers carbon intensity and maximizes renewable diesel production; and a new state of the art feedstock pre-treater combined with proximity to temperate oilseeds and low-carbon product markets will provide MRL with significant sourcing and logistics advantages.

CMR will continue to own and operate the conventional Great Falls Specialty Refinery with a reconfigured processing capacity of 12,000 barrels per day of Canadian crude. The refinery is focused on the production of high-quality Specialty Asphalt, as well as satisfying local demand for conventional fuels. CMR anticipates the refinery will generate 60% of historical (pre-conversion) Adjusted EBITDA after the hydrocracker is separated. Calumet owns 100% of the equity of CMR.

As a result of these transactions, Calumet received net cash proceeds of approximately $199 million and has begun to reduce outstanding debt by issuing a notice of redemption today for the $80 million outstanding principal amount of its 7.625% Senior Notes due 2022.

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Category: Fuels

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