Marathon announces closing of Martinez Renewables joint venture with Neste
Marathon Petroleum Corp. announced Sept. 21 the closing of its joint venture with Neste Corp. for the Martinez renewables project.
All required closing conditions have been met, including the receipt of the necessary permits and regulatory approvals.
The companies first announced their intention to partner on the renewable diesel project March 1.
The partnership, to be called Martinez Renewables, is structured as a 50/50 joint venture, with Neste to contribute a total of $1 billion, inclusive of half of the total project-development costs projected at $1.2 billion through the completion of the project.
Marathon Petroleum will continue to manage the completion of the conversion project and will operate the facility once construction is complete.
The annual feedstock-supply requirements are split between the joint-venture partners, which include specific commitments to supply advantaged feedstocks.
The annual production output will be shared evenly between the joint-venture partners, and each partner will have the ability to market its share of the products.
The joint venture, being optimally located to strengthen both partners’ footprint in renewable fuels, will utilize existing processing infrastructure and diverse inbound and outbound logistics.
“This transaction reflects Marathon Petroleum’s commitment to provide low carbon-intensity feedstocks to support California’s Low Carbon Fuel Standard goals,” said Michael J. Hennigan, president and CEO of Marathon Petroleum. “We expect the partnership to improve the overall economics of the project through the improved procurement of advantaged feedstock. This strategic partnership also creates a platform for additional collaboration within renewables. We believe there will be opportunities to leverage the differentiated knowledge and capabilities of two industry leaders as we pursue our shared commitment to the energy evolution and goal of leading in sustainable energy.”
The first phase of the Martinez renewables project facility is currently targeted to be mechanically complete by the end of this year.
Initial production capacity is expected to be 260 million gallons per year (mgy) of renewable fuels.
Pretreatment capabilities are expected to come online in the second half of 2023.
The facility is expected to be capable of producing 730 mgy by the end of 2023.
