By ROBIN SHANNON

Staff Reporter

NORCO – Valero Energy Corp. will use about $300 million in Gulf Opportunity Zone Bonds to help finance a new hydrocracker at its Norco refinery.

The state bond commission originally approved the funding in October, but the company had not decided to move on plans for a $1.4 million expansion at the refinery until an announcement was made Monday.

Valero spokesman Bill Day said if the project goes as planned, the hydrocracker unit could be operational by the end of 2013.

Day said the expansion project would not increase production at the facility, which already produces 250,000 barrels of oil per day, but would increase the proportion of ultra-low sulfur diesel produced in the company’s system. He said the project is expected to increase production of gasoline by 11,000 barrels per day, and ultra-low sulfur diesel by 49,000 barrels per day.

The expansion is expected to create about 30 permanent full time jobs, and about 1,500 construction jobs. The company employs 500 people at the Norco refinery. Day said the company had hoped to break ground on the expansion in 2008, but the project was shelved when oil prices fell.

Day explained that a hydrocracker is a unit that produces distillates such as diesel, kerosene, and heating oil by combining hydrogen gas with a catalyst in an effort to break down the heavier elements of crude oil.

The refinery also plans to build a new dock on the Mississippi River, as well as a bridge over River Road. The access will allow the refinery to move heavy equipment from the river to the refinery complex easier.