Marathon Petroleum has released first-quarter financial results, which provide an update on its agreement with Neste to form a joint venture (JV) for the renewable diesel project under development at its Martinez refinery in California.
MPC first announced in March it had entered into definitive agreements to form a joint venture with Neste for the Martinez renewable fuels project. According to MCP, the partnership will be structured as a 50/50 joint venture with Neste expected to contribute a total of $1 billion, inclusive of half of the total estimated development costs.
MPC said it will continue to manage project execution and operate the facility once construction is complete. 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, according to the company.
The Martinez facility is currently expected to have a production capacity of 260 million gallons per year of renewable diesel in the second half of 2022. A feedstock pre-treatment system is expected to come online next year.
By the end of 2023, MPC said the facility is expected to ramp up production to 730 million gallons per year. The company also noted that the expected and targeted timelines for these production capacities is depending on the timing of receiving necessary permits.
During an earnings call, MPC CEO Mike Hennigan said the intended partnership with Neste will create a platform for additional collaboration on renewable fuels. For the Martinez facility, he said Contra Costa County has certified the environmental impact report for the project and MPC is hopeful that final approval will be given soon.
Regarding operations at MCP’s renewable diesel operations in Dickinson, North Dakota, Hennigan noted that the company is working to optimise the plant and maximise profitability. He discussed the importance of feedstock optionality at the Dickinson refinery enabled by offsite pre-treatment capabilities and said feedstock pre-treatment will be incorporated onsite at Martinez.
Marathon provides update on Martinez JV with Neste
