Finland-headed oil refiner and renewable products producer Neste Oyj and US-based Marathon Petroleum Corporation (Marathon) have closed the transaction for the previously announced establishment of a joint venture in California to be called "Martinez Renewables".
On 1 March 2022, Neste Corporation and Marathon Petroleum Corporation (Marathon) announced an agreement to establish a 50/50 joint venture to produce renewable diesel following a conversion project of Marathon’s refinery in Martinez, California (CA) – Martinez Renewable Fuels project.
All required closing conditions have been met, including the receipt of the necessary permits and regulatory approvals, and Neste and Marathon have now closed the transaction for the establishment of the joint venture to be called Martinez Renewables.
With Martinez Renewables, we are taking one important step further in the execution of Neste’s renewables growth strategy. The partnership strengthens our footprint in the United States, with a renewable diesel production facility in the growing California market, said Matti Lehmus, Neste’s President and CEO.
This positions Neste as a global producer of renewable diesel, sustainable aviation fuel, and renewable feedstock for polymers and chemicals, with production operations in Asia, Europe, and North America, Matti Lehmus said.
An equal share of output
Through Martinez Renewables, Neste obtains a 50 percent interest in the Martinez Renewable Fuels project.
The facility will be operated by Marathon, and the production output will be split evenly between the joint venture partners.
This transaction reflects MPC’s commitment to providing low carbon-intensity feedstocks to support California’s Low Carbon Fuel Standard goals. We expect the partnership to improve the overall economics of the project through the improved procurement of advantaged feedstock, said Michael J. Hennigan, President, and CEO of Marathon.
Commence production in 2023
Martinez Renewables is expected to commence production in early 2023. Pretreatment capabilities are expected to come online in the second half of 2023 and the facility is expected to be capable of producing 2.1 million tons (730 million US gallons or about 2.76 billion litres) per year by the end of 2023.
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, Michael J. Hennigan said.
Upon completion, Martinez Renewables is expected to increase Neste’s renewable products capacity by slightly over 1 million tons (365 million US gallons or roughly 1.38 billion litres) per annum.