MOSCOW (MRC) -- Marathon Petroleum Corp and Archer-Daniels-Midland Co announced a joint venture to produce soybean oil that will be exclusively sold to Marathon as a renewable diesel feedstock, according to Hydrocarbonprocessing.
Refiners are on the hunt for secure access to feedstocks for renewable fuels amid supply constraints and soaring prices for fats, greases and oils.
The JV soybean processing complex in Spiritwood, North Dakota, is expected to produce about 600 million pounds of refined soybean oil annually, enough feedstock for about 75 million gallons of renewable diesel per year when complete in 2023, the companies said.
That is approximately 40% of the feedstock needed to supply Marathon's nearby Dickinson, North Dakota, plant, which can process about 180 million gallons of renewable diesel annually.
Marathon also plans to convert its idled Martinez, California refinery to produce 730 million gallons per year of renewable fuels, one of a number of refiners ramping up green fuel production.
The project creates a domestic buyer for the state's export-dependent soybean producers, who saw demand from top buyer China, evaporate during the US-China trade war.
ADM executive Ken Campbell said he believes renewable diesel demand may be as much as 5 billion gallons by 2025.
But Marathon told investors last quarter that soybean oil's economics were "challenged" because higher prices coupled with the relatively higher carbon intensity of the oil limits refiners' ability to profit on production.
The JV will be majority-owned by ADM with a 75% stake, while Marathon Petroleum will own the rest.
As MRC reported earlier, Marathon Petroleum, the largest US refiner, is "hopeful" that the US refining sector will recover as demand for gasoline and diesel picks up, but remains cautious about the impact of the spreading delta variant of the coronavirus.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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.
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