Marathon Petroleum Corp Announces Closing of Martinez Renewables JV with Neste

Rhea-AI Summary

Marathon Petroleum Corp. (NYSE: MPC) has successfully closed its joint venture with Neste for the Martinez renewables project, meeting all required conditions, including regulatory approvals. The 50/50 joint venture involves a total investment of $1 billion from Neste towards projected project costs of $1.2 billion. MPC will manage the project, targeting an initial production capacity of 260 million gallons per year and potential growth to 730 million gallons by the end of 2023. This partnership aims to enhance low carbon-intensity feedstock availability in California.

Positive

• Closing of a significant joint venture worth $1 billion with Neste.
• Projected total project costs of $1.2 billion, indicating strong investment interest.
• Initial production capacity of 260 million gallons per year, with potential increase to 730 million gallons by end of 2023.

Negative

• Risks related to achieving projected production capacities within expected time frames.
• Dependency on availability of advantaged feedstocks for project success.

FINDLAY, Ohio, Sept. 21, 2022 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced the closing of its joint venture with Neste for the Martinez renewables project. All required closing conditions have been met, including the receipt of the necessary permits and regulatory approvals.

The partnership, to be called Martinez Renewables, is structured as a 50/50 joint venture, with Neste to contribute a total of $1 billion, inclusive of half of the total project development costs projected at $1.2 billion through the completion of the project. MPC will continue to manage the completion of the conversion project and will operate the facility once construction is complete. The annual feedstock supply requirements are split between the joint venture partners, which include specific commitments to supply advantaged feedstocks. The annual production output will be shared evenly between the joint venture partners, and each partner will have the ability to market its share of the products. The JV, being optimally located to strengthen both partners' footprint in renewable fuels, will utilize existing processing infrastructure and diverse inbound and outbound logistics.

"This transaction reflects MPC's commitment to provide low carbon-intensity feedstocks to support California's Low Carbon Fuel Standard goals. We expect the partnership to improve the overall economics of the project through the improved procurement of advantaged feedstock," said President and Chief Executive Officer Michael J. Hennigan. "This strategic partnership also creates a platform for additional collaboration within renewables. We believe there will be opportunities to leverage the differentiated knowledge and capabilities of two industry leaders as we pursue our shared commitment to the energy evolution and goal of leading in sustainable energy."

The first phase of the Martinez renewables project facility is currently targeted to be mechanically complete by year-end 2022. Initial production capacity is expected to be 260 million gallons per year of renewable fuels. Pretreatment capabilities are expected to come online in the second half of 2023 and the facility is expected to be capable of producing 730 million gallons per year by the end of 2023.

About Marathon Petroleum Corporation

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.

Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President
Brian Worthington, Manager
Kenan Kinsey, Analyst

Media Contact: (419) 421-3312
Jamal Kheiry, Communications Manager

Forward-Looking Statements

This press release contains forward-looking statements regarding MPC. These forward-looking statements relate to, among other things, MPC's expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans, operating cost and capital expenditure reduction objectives and environmental, social and governance goals. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "proposition," "prospective," "pursue," "seek," "should," "strategy," "target," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. MPC cautions that these statements are based on management's current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of MPC, that could cause actual results or events to differ materially from the statements made herein. Factors that could cause actual results or events to differ materially from those implied in the forward-looking statements include:  the ability to complete the Martinez renewables project and reach the expected production capacities of the project within the expected time frames if at all; the ability to complete the project for the estimated total project cost; the availability of advantaged feedstocks; and the factors set forth under the heading "Risk Factors" in MPC's Annual Reports on Form 10-K for the year ended Dec. 31, 2021, and in other filings with the Securities and Exchange Commission (SEC). Any forward-looking statement speaks only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statement except to the extent required by applicable law. Copies of MPC's Annual Report on Form 10-K and other SEC filings are available on the SEC's website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.

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SOURCE Marathon Petroleum Corporation

FAQ

What is the Martinez renewables project by Marathon Petroleum (MPC)?

The Martinez renewables project is a joint venture between Marathon Petroleum and Neste aimed at producing renewable fuels, with an initial capacity of 260 million gallons per year.

How much has Neste invested in the Martinez renewables project?

Neste has committed a total of $1 billion as part of the 50/50 joint venture with Marathon Petroleum for the Martinez project.

What are the expected production capacities for the Martinez renewables project?

The project aims for an initial production capacity of 260 million gallons per year, increasing to 730 million gallons by the end of 2023.

When did Marathon Petroleum announce the closing of the joint venture with Neste?

Marathon Petroleum announced the closing of its joint venture with Neste on September 21, 2022.