Martinez renewable fuels is expected to have a capability to produce 730 million gallons per year by the end of 2023


Neste headquarters in Espoo. (Credit: J-P Kärnä/Wikipedia.)

US-based Marathon Petroleum has partnered with Finnish oil refiner Neste for the development of its Martinez renewable fuels project in California, US.

The two companies have signed definitive agreements to form a 50-50 joint venture (JV).

The JV will convert Marathon’s Martinez refinery, which was discontinued from operations in 2020, to produce renewable fuels, pending environmental permits.

Neste is expected to contribute a total of $1bn, which includes half of the total estimated project development costs, through the project’s completion.

The JV is subject to customary closing conditions and regulatory approvals, including necessary permits based on certification of a final Environmental Impact Report.

Marathon Petroleum president and chief executive officer Michael J Hennigan “We’re excited to partner with Neste as this strategic partnership enhances our strong Martinez project by leveraging our complementary strengths and expertise.

“The project will utilize existing processing infrastructure, diverse inbound and outbound logistics, and is optimally located to support California’s LCFS goals while strengthening MPC’s footprint in renewable fuels.

“Our partnership with Neste signals another step in our commitment to the energy evolution and our focus on lowering the carbon intensity of our operations and the products we manufacture.”

Under the JV, MPC will leverage its experience in renewable diesel facility conversion, large capital project execution, and operating expertise in the California market.

Simultaneously, Neste would contribute its knowledge in sustainable feedstock sourcing and in renewable liquid fuels production, for the JV.

The Martinez facility is expected to have a production capacity of 260 million gallons per year of renewable diesel in the later half this year.

The project is expected to have a capability to produce 730 million gallons per year by 2023, with pre-treatment capabilities coming online in that year.

Marathon will continue to manage project execution and operate the facility, once the construction is complete.

Both Marathon and Neste would individually source feedstock for the facility and will market the fuels separately under their own brands.

In January this year, Reuters reported that Marathon Petroleum is contemplating to convert Phillips 66’s Alliance refinery into a renewable fuel plant.