Marathon Petroleum Corporation (NYSE:MPC) is the newest energy company available to investors, as Marathon Oil (NYSE:MRO) has completed the spin off announced earlier in 2011. The new company represents a pure play on the downstream part of the energy complex.

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Details of Spin off
In January 2011, Marathon Oil announced that the company would separate into two entities through a spin off of the company's downstream operations. These operations included pipelines, refiners, storage and marketing businesses.

Management cited various benefits of the separation, including a singular focus when allocating capital and resources, more transparency for the investment community and a lower cost of equity. Marathon Oil shareholders received one share of Marathon Petroleum Corporation for every two shares of Marathon Oil.

Marathon Petroleum Corporation
Marathon Petroleum Corporation is organized into three business segments - Refining & Marketing, Speedway and Pipeline Transportation. In 2010, the Refining & Marketing comprised 63% of the company's operating income, while Speedway and Pipeline Transportation provided 23% and 14% of operating income, respectively.

Refining and Marketing
Marathon Petroleum Corporation owns and operates six refineries located in the Midwest and Gulf Coast regions in the United States. The refineries have the capacity to refine 1.142 million barrels per day of crude oil.

One refinery that is undergoing an extensive upgrade by the company is the Detroit facility, which has current capacity of 106,000 barrels per day. Marathon Petroleum Corporation is spending $2.2 billion to enable the refinery to handle a higher volume of heavy crude oil that is expected to come in from Canada. The total capacity at Detroit will increase to 120,000 barrels per day and the project is scheduled to be completed by the second half of 2012.

Other refiners in the United States include Valero (NYSE:VLO), which owns 14 refiners with capacity of 2.6 million barrels per day. Holly Frontier Corporation (NYSE:FTO) owns five refineries with capacity of 443,000 barrels per day.

Marathon Petroleum Corporation also has an extensive network of 5,100 Marathon-branded retail outlets located in 18 states. The Refining & Marketing segment earned $800 million in operating income in 2010, up from $452 million in 2009.

Speedway
Speedway is a retail marketing operation selling gasoline and convenience store items with approximately 1,350 locations in seven states in the Midwestern region. Speedway earned $293 million in operating income in 2010, up from $212 million in 2009.

Pipeline Transportation
Marathon Petroleum Corporation has an ownership interest in approximately 9,600 miles of pipelines used to transport crude oil and refined products. The company also has an interest in other non-operated pipelines in the United States.

The company's other assets in this segment include light product and asphalt terminals as well as railcars, barges, towboats and trucks. The Pipeline Transportation segment earned $183 million in operating income in 2010, up from $172 million in 2009.

The Bottom Line
Marathon Petroleum Corporation is now an independent company after Marathon Oil completed the reorganization announced in January 2011. Investors now have another way to play the downstream business in the energy sector. (For more, see, Cashing In On Corporate Restructuring.)

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