Marathon Petroleum Corporation (MPC Quick QuoteMPC - Free Report) and Archer-Daniels-Midland Company (ADM) recently announced that their joint venture (JV) to manufacture soybean oil to meet rapidly-expanding demand for renewable diesel fuel came to a close.

Announced in August first, the joint venture Green Bison Soy Processing, LLC was meant to own and manage a soybean processing facility in Spiritwood, ND, with ADM holding 75% and MPC owning 25%.

The Spiritwood facility, 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, president of ADM's North America Oils, Biodiesel and Renewable Chemicals 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. This will help boost 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.

This joint venture will enable MPC to improve its capacity to optimize and acquire advantageous feedstock for its adjacent Dickinson facility, logistically. It will also provide Marathon Petroleum with a foundation for collaborations with two world-class partners as the same invests in a sustainable, energy-diverse future.

The approximately $350-million worth Spiritwood complex will feature cutting-edge automation technologies and can 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.

Zacks Rank & Key Picks

Marathon Petroleum currently has a Zack Rank #3 (Hold). Investors interested in the  energy  sector might look at the following stocks worth considering with a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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