Calumet's Montana Renewables Unit Rejiggers Plan to Expand Aviation Fuel Production

By Kelly Cloonan

Calumet's Montana Renewables subsidiary is switching up its plan to expand its sustainable aviation fuel production, targeting an approach that requires less capital.

The company said Tuesday it now plans to repurpose installed refining equipment from an adjacent facility to reach about 200 million gallons of sustainable aviation fuel production annually, and 17,000 barrels per day of total product sales by the end of 2028.

The expansion requires a total remaining project capital spend of $137 million, compared with a $1.2 billion project contemplated in an original loan issued by the U.S. Department of Energy through its Office of Energy Dominance Financing, the company said.

The new plan is structured as six small projects, rather than a single large construction project, with the aim of increasing returns and cutting down on construction risk, the company said.

Montana Renewables and EDF amended their loan guarantee agreement from last year due to the lower capital requirements of the new plan. The loan remains structured in two tranches, with the first tranche of $782 million funded last year and used to recapitalize Montana Renewables. Under the amended agreement, the remaining loan availability was reduced to a single, final draw of $34 million, from up to $658 million.

The move aims to keep a simple capital structure for future strategic opportunities while accelerating the benefits of increased throughput, improved yields and reduced unit costs, Calumet said.

"Our amended agreement with the DOE facilitates innovative technology and domestic energy security at a fraction of the original cost," Calumet's Chief Executive Todd Borgmann said.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

September 01, 2026 13:08 ET (17:08 GMT)