US oil refining company Marathon Petroleum Corp (NYSE:MPC) on Wednesday said that it has taken a 49.9% stake in local emerging renewable natural gas (RNG) producer LF Bioenergy in a deal valued at up to USD 100 million (EUR 94.7m).
The shareholding was purchased from US investment firm Cresta Fund Management. The transaction consideration includes a purchase price of USD 50 million plus up to USD 50 million more to be paid depending on the achievement of certain earn-out targets.
LF Bioenergy is focused on developing a portfolio of dairy farm-based, low-carbon intensity RNG projects. The company expects to put its first facility into operation in the first half of 2023.
MPC has committed to supporting LF Bioenergy in the development of its portfolio to produce over 6,500 million metric British thermal units (MMBtu) per day by the end of 2026.
"This RNG transaction demonstrates our commitment to lower carbon investments," said Dave Heppner, MPC's senior vice president of strategy and business development.
MPC already has an established renewable fuels portfolio, having various facilities across the US, including the Dickinson Renewable Diesel Facility in North Dakota and the Cincinnati Pretreatment Facility in Ohio.
The US firm last year agreed to sell to Finnish renewable fuels producer Neste a 50% stake in its Martinez Renewable Fuels project, which involves the conversion of MPC’s refinery in Martinez, California, as part of a joint venture agreement.
(USD 1 = EUR 0.947)
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