Marathon Petroleum Corporation (MPC Quick QuoteMPC ) and Archer-Daniels-Midland Company (ADM Quick QuoteADM ) recently entered into an agreement to form a joint venture for producing soybean oil to meet steadily expanding demand for renewable diesel fuel.
The Spiritwood facility, which is expected to be completed in 2023, will source and process local soybeans and supply the resultant soybean oil solely to Marathon Petroleum. The Spiritwood complex has plans to produce 600 million pounds of refined soybean oil per year, which is enough feedstock for 75 million gallons of sustainable diesel, annually.
Apart from the Spiritwood joint venture, the firms intend to collaborate on investigating other agricultural prospects to promote renewable transportation fuels.
Ken Campbell, ADM’s North America Oils, Biodiesel and Renewable Chemicals president, said that the entity already supplies Marathon Petroleum with soybean oil for renewable diesel manufacturing but this contract certainly expands their partnership, significantly.
Both companies have the acumen, size and capabilities to deliver sustainable outcomes right from the agricultural farm to the fuel being delivered in millions of commercial and personal vehicles in this case, thereby boosting renewable diesel demand that ADM estimates could reach 5 billion gallons by 2025. More positive news is that the organization sees potential in generating more sustainable solutions by forging further alliances.
MPC’s senior vice president of strategy and business development Dave Heppner stated, “This joint venture marks another step in advancing our ability to optimize and source logistically advantaged feedstock for our nearby Dickinson facility, and also creates a platform for further collaboration with a 2 world-class partner as we continue to invest in a sustainable, energy-diverse future.”
The approximately $350-million worth Spiritwood complex will feature cutting-edge automation technologies and have the potential to process 150,000 bushels of soybeans per day once completed. Plenty of new jobs are created in the region as a result of the new complex building and the facility is said to employ roughly 75 people once it is fully functional. The Spiritwood complex intends to commence production, keeping the 2023 harvest in view.
About Marathon Petroleum
Marathon Petroleum is an integrated, downstream energy company. It got its current form from the 2011 spin-off of Houston, TX-based Marathon Oil Corporation’s refining/sales business into a separate, independent and publicly-traded entity. The company operates the country’s largest refining system with more than 3 million barrels of crude oil capacity per day across 16 refineries. Its marketing system includes branded locations across the United States including Marathon brand retail outlets.
Zacks Rank & Key Picks
Marathon Petroleum currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy space are Matador Resources Company (MTDR Quick QuoteMTDR ) and Continental Resources, Inc. (CLR Quick QuoteCLR ) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.