Finnish Neste forms US joint venture for production of renewable fuels

Finnish Neste forms US joint venture for production of renewable fuels

Renewables

United States/Finland – With the signing of definitive agreements, Neste Corporation and Marathon Petroleum (Marathon) have agreed to form a 50/50 joint venture to produce renewable diesel after a conversion project at Marathon’s Martinez refinery in California.

An Environmental Impact Report (EIR) certification is required before the joint venture can close. Customary closing conditions and regulatory approvals include getting the necessary permits.

Amounting to approximately EUR 0.9 billion (USD 1.0 billion), Neste’s total investment includes half of the total project development costs expected through the project’s completion. As a result of the project, Neste’s renewable product capacity is expected to rise by approximately 1 million tons per year. After 2022, the renewable diesel industry is expected to be fully operational. A nameplate annual capacity of 2.1 million tons (730 million US gallons) is expected to be reached by the end of 2023, according to the facility’s current schedule.

50-50 project

Neste gains a 50% stake in the Martinez Renewable Fuels project as a result of this joint venture. Both partners will be responsible for marketing the products under their own brand and responsibility, and the production output will be split evenly between them. The facility will be run by Marathon, a well-known refinery operator in the United States with extensive experience in major capital projects. For the joint venture, both Neste and Marathon will be responsible for the procurement of feedstock.

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