MARATHON AND NESTE JOIN TO CONVERT CALIFORNIA REFINERY TO RENEWABLES
MARTINEZ, CA. —Marathon Petroleum and Neste have signed a deal to take co-ownership of the Marathon refinery in Martinez, CA., and convert it to produce renewable fuels.
The joint venture agreement, announced at the end of September, creates a new company, Martinez Renewables, that will be owned equally by Marathon and Neste.
The Martinez refinery was shuttered during the demand drop-off in 2020 during the global pandemic and has not restarted.
The first phase of the conversion is planned to be mechanically complete by end of the year and have an initial production capacity of 260 million gallons of renewable fuels. The companies expect to have a production capacity of 730 million gallons of renewable fuels per year by the end of 2023.
Under the terms of the joint venture, Neste is expected to contribute a total of $1 billion to complete the conversion, including half of the estimated project costs. Marathon, which owned the refinery, will be responsible for managing the completion of the conversion, as well as operation of the facility.
"This transaction reflects MPC's commitment to provide low carbon-intensity feedstocks to support California's Low Carbon Fuel Standard goals," said Marathon President Michael Hennigan. "This strategic partnership also creates a platform for additional collaboration within renewables."
Neste President Matti Lehmus added, "The partnership strengthens our footprint in the United States, with a renewable diesel production facility in the growing California market."