Calumet Provides 2022 Year End Operational Update

News provided by

Calumet Specialty Products Partners, L.P.

Dec 29, 2022, 08:38 ET

Renewable Diesel operating successfully
Sequential commissioning of renewable hydrogen, Sustainable Aviation Fuel ("SAF"), and feedstock pre-treater to occur in 1Q2023
2024 max SAF expansion engineering and procurement has begun
Company-wide operations recovering from arctic freeze; affected plants have restarted or are in startup

INDIANAPOLIS, Dec. 29, 2022 /PRNewswire/ -- Calumet Specialty Products Partners, L.P (NASDAQ: CLMT, "Calumet", "Partnership", "we" or "our") today provided a year-end operational update, including a project and business update at Montana Renewables and company-wide impact from the December arctic blast.

Montana Renewables and Montana Refining:

Separation of Montana Renewables and the Great Falls Specialty Asphalt refinery was completed during the fourth quarter with both businesses operating in their new services.

The 12,000 bpd specialty asphalt refinery is presently running at nameplate capacity on Canadian heavy crude.

Montana Renewables commissioned its modified hydrocracker in renewable diesel service on November 5, then retrofitted additional winterization capability during the month of November. We generated a full month of on-spec Renewable Diesel production in December and commenced rail shipments late in the month after establishing product inventories. Catalyst performance has been consistent and met the expected performance envelope provided by Haldor Topsoe. The current 6,000 bpd capacity will increase to 12,000 bpd with the sequential commissioning of renewable hydrogen, SAF, and feedstock pre-treater which are expected online in that order in 1Q2023.

Preliminary engineering and procurement is beginning for the expected 2024 expansion including an option to maximize SAF yield to 85%. Montana Renewables recently acquired the second reactor needed for its MAX SAF option, and while the company has not made a final installation decision, great interest from the existing Lazard process warranted the opportunistic reactor purchase. This opportunity further cements our first mover position in the rapidly evolving SAF market.

"Our strategy to retain a downsized crude oil refinery while carving out Montana Renewables meant a higher degree of difficulty compared to simply converting a closed refinery", said Bruce Fleming, EVP Montana Renewables and Corporate Development. "Delivering an aggressive timeline, navigating two winter construction seasons, minimizing 2022 downtime for turnaround and carveout, building safely on an operating site, and moving quickly through commissioning all demonstrate the high capabilities of the Great Falls workforce. While not without setbacks, we are proud of the journey. Going forward, the full economic contribution of the specialty asphalt refinery will follow normal seasonal patterns, and Montana Renewables will reach steady state earnings after the first quarter commissioning sequence is complete."

Specialties Business:

Calumet's specialty business has performed exceptionally well in 2022, including throughput and profitability records across the system and at most individual plants. This performance was supported by exceptional execution of key turnarounds in Shreveport and Princeton and capital investments targeting reliability and deeper integration between assets, widening a key competitive advantage of this business.

Last week, Calumet's production was impacted with nearly all units being either circulated or shutdown during the extreme weather event. The Shreveport plant was hampered by a city-wide water crisis resulting in a lack of water systems necessary to restart the plant. Since then, city water has been restored, and we are currently in startup. All other plants are back up in production.

Demand in the specialty business continues to be healthy considering routine seasonal volume patterns. We see typical soft winter asphalt margins and continue to experience strong specialty product margins as we enter 2023.

"I'm extremely proud of our operating teams across the Calumet system," said Todd Borgmann, CEO. "The recent arctic weather has challenged the industry, and Calumet is no different. While most families across our country were able to enjoy time off over the past couple weeks, many Calumet employees spent their holiday at our plants in extreme conditions ensuring that our business could be restored safely and quickly in order to meet customer needs with minimal disruption. I am continually grateful and impressed by the resolve of Calumet's employees."

About the Partnership

Calumet manufactures, formulates, and markets a diversified slate of specialty products to customers in 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 "expect," "continue," "should," or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.

For additional information regarding factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission ("SEC"), including the risk factors and other cautionary statements in our latest Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the SEC.

SOURCE Calumet Specialty Products Partners, L.P.