Marathon Petroleum has announced the acquisition of a 49.9% interest in LF Bioenergy, an emerging producer of renewable natural gas (RNG) in the US, from Cresta Fund Management for $50 million (€46.2m).
The agreement includes the potential for up to an additional $50 million (€46.2m) based on the achievement of predetermined earn-out targets.
LF Bioenergy has been focused on developing and growing a portfolio of dairy farm-based, low carbon intensity RNG projects, with current projects under various stages of development - the first facility is expected to be operational in the first half of this year.
LF Bioenergy said its management and origination teams continue to expand its portfolio with additional sanctioned projects while progressing their existing pipeline of opportunities toward final investment decisions.
As specific project milestones are achieved, MPC is expected to fund its share of capital expenditures, building out this portfolio to produce over 6,500 MMBtu per day by the end of 2026.
"This RNG transaction demonstrates our commitment to lower carbon investments," said Dave Heppner, MPC's senior vice president of Strategy and Business Development. "This platform will create the opportunity for further integration and advances MPC's goal to lower the carbon intensity of its operations and the products it offers."
Jones Day acted as legal advisor and Barclays acted as exclusive financial advisor to MPC in connection with this transaction. Weil, Gotshal & Manges LLP acted as legal advisor and Guggenheim Securities LLC acted as financial advisor to Cresta and LF Bioenergy.