Neste Corp. (Espoo, Finland) signed definitive agreements for the establishment of a 50/50 joint venture (JV) with Marathon Petroleum Corp. (Findlay, Ohio). The joint venture will produce renewable diesel following a conversion project of Marathon’s refinery in Martinez, California (the Martinez Renewable Fuels project). The closing of the joint venture is subject to customary closing conditions and regulatory approvals, including obtaining the necessary permits, which depend upon certification of a final Environmental Impact Report.
Neste’s total investment will amount to approximately EUR 0.9 billion ($1.0 billion), inclusive of half of the total project development costs projected through the completion of the project. The project is expected to increase Neste’s renewable products capacity by slightly over 1 million tons (365 million US gallons) per annum. Production of renewable diesel is expected to come online in the second half of 2022. The facility is planned to reach its full annual nameplate capacity of 2.1 million tons (730 million US gallons) by the end of 2023.
“This is a very important step in our renewables growth strategy execution. The location of the facility is in the middle of the growing renewable fuel market in California. The partnership will further strengthen our footprint in the United States, as we will have a broad value chain that covers feedstock sourcing to renewables production and sales in the US. We are thrilled to partner with Marathon: we both share an ambition in offering more high-quality, lower-emission renewable products, thus helping customers to achieve their sustainability goals,” says Peter Vanacker, Neste’s President and Chief Executive Officer.
“We have committed to helping our customers decrease their greenhouse gas emissions by at least 20 million tons of CO2eq annually by 2030. This joint venture will help us in exceeding our commitment as it will bring a substantial amount of renewable diesel to our customers in the US. Our ongoing Singapore expansion project and this joint venture will increase our total production capacity of renewable products to 5.5 million tons by the end of 2023 and we will be the only global provider of renewable products with a production footprint in North America, Asia and Europe. As announced in Neste’s Financial Statement Release 2021, the project for a possible next worldscale renewables refinery in Rotterdam is in the engineering phase and we are approaching readiness for a final investment decision during the next months,” continues Vanacker.
Through this joint venture Neste obtains a 50% interest in the Martinez Renewable Fuels project. The production output will be split evenly between the joint venture partners, and each partner will be responsible to market the products under its own brand and responsibility. The facility will be operated by Marathon, which has long experience as a leading refinery operator and in executing major capex projects in the US. Both Neste and Marathon will be responsible for feedstock sourcing for the joint venture.