Calumet Provides Second Quarter Operational Update

During the second quarter, Montana Renewables became the largest sustainable aviation fuel producer in North America in addition to establishing itself as a top tier renewable diesel business. The Northwest Louisiana Specialties complex completed recovery from tornado events which interrupted external utilities and production.

INDIANAPOLIS, July 10, 2023 /PRNewswire/ -- Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) ("Calumet," "we," "our" or "us") today provided a second quarter update on Montana Renewables and the Specialties business.

Montana Renewables

Ramp up of unit operations was completed during the second quarter, making Montana Renewables the largest producer of Sustainable Aviation Fuel ("SAF") in North America. "The Montana Renewables team delivered on our first mover strategy and quickly adapted to our new processing capabilities" said Todd Borgmann, Calumet CEO. "We worked through the expected new equipment teething problems at an excellent pace, and we enter the next quarter on track to demonstrate the steady-state earnings power of this business." 

The second quarter also delivered an industry first with the successful startup of our ARA feedstock pretreatment technology.   "Commissioning and ramp-up of our next generation pretreater was a carefully calculated decision that paid off, with the industry watching as serial number one of the ARA continuous process performed as planned. This fully unlocks the huge feedstock optionality that comes with our advantaged location," said Bruce Fleming, CEO Montana Renewables and EVP Corporate Development. 

Montana Renewables enters the third quarter running 12,500 barrels per day ("bpd") of renewable feedstock.  Approximately 50% of renewable diesel production is currently being sold into Canada; all of the SAF is being delivered to Shell Aviation; and the unique renewable hydrogen plant capacity was demonstrated.  Feedstock mix is presently 8,000 bpd untreated and 4,500 bpd of treated safety stock as we rotate from clean to dirty inventory.  "With these milestones met, we have demonstrated Untreated EBITDA of $1.25 to $1.45 per gallon and confirmed top-tier status given Montana Renewables' unique advantages of preferred location, better technology and higher margins," said Fleming. 

The planned hydraulic expansion and MaxSAF developments both continue as we strategically seek to grow our first-mover position in the rapidly accelerating SAF market.  Funding discussions with the Department of Energy are ongoing.

Calumet Specialties

The Northwest Louisiana area endured extreme weather consisting of tornadoes and hurricane-force straight-line wind events during the quarter, the most recent of which left over 250,000 people without power. These weather events resulted in the repeated loss of external electrical supply to all four facilities that make up our Northwest Louisiana specialties complex.   Disruptions during the quarter resulted in reduced production volume of approximately 500,000 barrels. "Despite the loss of power and property damage across the region, including to a number of our employees' homes, the team rallied to restart and normalize operations, complete the turnaround at our Cotton Valley Solvents facility, and advance maintenance at our Princeton and Shreveport facilities," said Borgmann.

Our investment program to further harden and integrate our unique specialties complex continues.  While we are approximately halfway through the three-year program, the foundational work completed thus far was instrumental in returning to normal operations.  "Meeting robust specialty product demand during these disruptions was a significant challenge, and I am proud of how our entire team responded" said Scott Obermeier, EVP Specialties. "With the plants running, we are now rebuilding inventories and focused on capturing the solid market demand in front of us. Performance Brands operations in Northwest Louisiana also experienced several power outages, which were more than offset by proactive inventory management and strong demand. During these extreme events we were able to prioritize needed deliveries of fuel to emergency responders and donate supplies of TruFuel to assist with clean-up efforts."

Strategically, the company continues to progress.  "With strong market conditions and assets in full operation, we expect to generate significant cash flow from both Specialties and Montana Renewables in the second half of the year," said Borgmann.  "Further, our Montana Renewables monetization strategy remains on track.  With proven operations and a tangible growth strategy, the appeal of Montana Renewables to potential investors, including the public market, continues to grow.  This combination of expected strong cash flows and a path to potential monetization leaves Calumet well positioned to achieve its strategic objectives of permanently de-levering the business and unlocking value for our unit holders."

Cautionary Statement Regarding Forward-Looking Statements

Certain statements and information in this press release, may constitute "forward-looking statements." The words "may," "expect," "plan," "intend," "should," "will," "believe" 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. Our forward-looking statements involve significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  In addition, we have based many of these forward-looking statements on assumptions that could cause our actual results to differ materially from our historical experience and our present expectations or projections. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. For information regarding factors that could cause our actual results to differ from our forward-looking statements, 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.

About Calumet

Calumet Specialty Products Partners, L.P. manufactures, formulates and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets.  Calumet is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America.

SOURCE Calumet Specialty Products Partners, L.P.