Calumet Expects About $30 Million a Year From Equipment Lease

Calumet expects a long-term equipment lease between two subsidiaries to generate about $30 million in annual income, supporting Montana Renewables’ expansion toward about 200 million gallons of sustainable aviation fuel a year by 2028.

Calumet Montana Refining entered the lease with Montana Renewables on Nov. 4. The agreement covers a hydrotreater, hydrogen plant, naphtha splitter and equipment for recovering renewable propane. Calumet Montana Refining will continue operating its specialty asphalt facility in a new configuration.

The lease income is expected to go to Calumet Montana Refining and Calumet’s restricted group, with payments coming from the company’s unrestricted group. The estimate is subject to adjustments.

Calumet announced the SAF production goal on Sept. 1, before the lease was entered. The company also set a target of reaching 17,000 barrels per day in total product sales by year-end 2028. These are targets, not reported production results.

Calumet estimates the project has $137 million in remaining capital needs, compared with $1.2 billion contemplated under the original Department of Energy-backed plan. The production and sales targets are for the end of 2028.