Marathon (MPC), Neste Form Joint Venture for Renewable Project

Marathon Petroleum MPC declared that it has finalized the previously proposed joint venture with the Finnish oil refining and marketing company — Neste. The two firms will now hold equal shares in the joint venture, Martinez Renewables, to convert the Martinez refinery to produce renewable fuels.

All necessary permits and regulatory approvals have been received for the project. Neste will invest a sum of $1 billion, including half of the total project development cost anticipated at around $1.2 billion, through the completion of the project.

Meanwhile, MPC will be responsible for managing the completion of the conversion project along with the operation of the facility upon completion.

Both partners will equally be responsible for feedstock sourcing and evenly share the annual production output from the site, with the ability to market their share of products.

Currently, the first phase of the Martinez facility is targeted to be mechanically complete by the end of this year. The initial production capacity is estimated at 260 million gallons per year of renewable fuels. Later, it will rise to its full nameplate production capacity of 730 million gallons per annum by year-end 2023.

Marathon Petroleum’s president and chief executive officer, Michael J. Hennigan, mentioned that the strategic partnership between the two firms produces 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," he added.

Findlay, OH-based Marathon Petroleum Corporation is a leading independent refiner, transporter and marketer of petroleum products. The company, in its current form, came into existence following the 2011 spin-off of Houston, TX-based Marathon Oil Corporation’s refining/sales business into a separate, independent and publicly traded entity.

MPC currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the energy space might also look at some other similar-ranked stocks — PBF Energy PBF, Murphy USA MUSA and EnLink Midstream ENLC. You can see the complete list of today’s Zacks #1 Rank stocks here.

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The Zacks Consensus Estimate for Murphy USA’s 2022 EPS has been revised upward by about 31.9% over the past 60 days from $18.27 to $24.09.

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