Finnish oil refining company Neste Corporation and US-based Marathon Petroleum have agreed to establish a 50/50 joint venture for production of renewable fuels.
Espoo HQ. Credit: Neste
Espoo HQ. Credit: Neste
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 €0.9 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 tonnes 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 tonnes by the end of 2023.
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“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," says Peter Vanacker, Neste’s President and Chief Executive Officer.
"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.”
Through this joint venture Neste obtains a 50% interest in the Martinez Renewable Fuels project, a renewable fuels manufacturing and terminal facility.
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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.
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