Marathon Petroleum Corp. 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.