Marathon Petroleum Corp has announced it has entered into definitive agreements to form a joint venture with Neste for its Martinez renewable fuels project.
The partnership will be structured as a 50/50 joint venture with Neste expected to contribute a total of $1 billion (€0.9 billion), inclusive of half of the total project development costs projected through the completion of the project.
Marathon will continue to manage project execution and operate the facility once construction is complete.
This strategic partnership is expected to advance the current project objectives of delivering low carbon intensity fuels to support California’s climate goals.
Marathon and Neste will leverage their complementary core competencies in the joint venture.
Marathon brings experience in renewable diesel facility conversion, large capital project execution, and operating expertise in the California market.
Neste brings knowledge in sustainable feedstock sourcing and in renewable liquid fuels production.
President and CEO Michael Hennigan said: “We’re excited to partner with Neste as this strategic partnership enhances our strong Martinez project by leveraging our complementary strengths and expertise and is consistent with our previously announced strategy to source low carbon intensity feedstocks through long-term arrangements, joint ventures and alliances.
“The project will utilise existing processing infrastructure, diverse inbound and outbound logistics, and is optimally located to support California’s LCFS goals while strengthening MPC’s footprint in renewable fuels.
“Our partnership with Neste signals another step in our commitment to the energy evolution and our focus on lowering the carbon intensity of our operations and the products we manufacture.”
The Martinez facility is currently targeted to have a production capacity of 260 million gallons per year of renewable diesel in the second half of 2022, with pretreatment capabilities to come online in 2023. The facility is expected to be capable of producing 730 million gallons per year by the end of 2023.