Montana eyes 150m gallons of SAF capacity by April

Montana Renewables said it is expecting to hit production capacity to 120m to 150m gallons of annual sustainable aviation fuel (SAF) capacity online with the turnaround and project beginning in the first week of March and completion targeted for late April.

The company said its goals are to “execute MaxSAF 150 safely, on time and on budget in the second quarter; continue improving our already strong cost levels; and… leverage our early mover advantage in SAF as we grow.”

Calumet’s, parent company of Montana Renewables, CEO Louis Borgmann while speaking at the earnings call said they booked a 60% improvement in operating costs over the last two years and is able to book a $1-2 per gallon premium for SAF over renewable diesel in its contracts.

“These contracts are all multiyear… opening up premium renewable markets globally that complement the strong local markets we serve,” Borgmann added.

Commenting on the timing and cost impact of MaxSAF ramp-up and SAF contract premiums, Borgmann added: “We expect just continued incremental improvement there… as we increase our volume, then we’ll see more unit efficiencies drop to the bottom line.”

Bruce Fleming, CEO of Montana Renewables Fleming explained that the company’s SAF contracts are structure to withstand shifts and are linked feedstock contracts.

Earlier in February, Montana Renewables signed a sustainable aviation fuel (SAF) production agreement with World Energy to deliver more than 70m gallons to the market over three years.

Under the agreement, World Energy will provide feedstock to Montana Renewables which will produce SAF on their behalf. MRL is one of the largest SAF producers in North America and is set to significantly increase SAF production capacity with its MaxSAF 150 expansion.