Marathon Petroleum has acquired a 49.9% interest in renewable natural gas (RNG) company LF Bioenergy for USD50m, said the company.
Marathon may pay a potential additional USD50m, based on certain earn-out targets. Dallas, Texas-based LF Bioenergy is described as an emerging RNG company, focused on developing and growing a portfolio of dairy farm-based, low carbon intensity RNG projects.
Its first facility, located in upstate New York, is nearing completion and expected to come into service in the first half of 2023. Marathon expects to fund its share of LF's capital expenditures as it hits specific project milestones, building out a portfolio to produce more than 6,500 MMBtu/day by the end of 2026, it said.
In a separate statement, LF said that Marathon "has invested in LF at a valuation of USD100m, with the potential to increase to USD200m as LF achieves pre-determined earn-out targets". LF is backed by private equity firm Cresta Fund Management.
In related news, Shell recently acquired 100% of Danish RNG producer Nature Energy, and Canadian energy infrastructure major Enbridge agreed to acquire a 10% stake in Divert, a US company that turns food waste into RNG.
We remind, Marathon Petroleum’s Q3 net income rose more than six-fold year on year to USD4.5bn, with the refining and marketing (R&M) margin more than doubling. Crude capacity utilisation was about 98%, with total throughput of 3.0m bbl/day in Q3 – compared with 93% and 2.8m bbl/day, respectively, in Q3 2021.
mrchub.com