RPT-CORRECTED-Kinder Morgan starts construction on Parkway pipeline

(Corrects name of pipeline to Parkway in headline and 1st graph)

NEW YORK Aug 22 (Reuters) - Kinder Morgan Energy Partners began construction of the Parkway Pipeline over the weekend, increasing the amount of gasoline, jet and diesel carried from Louisiana refineries to the oil hub of Collins, Mississippi.

The 136-mile, 16 inch pipeline will begin in Norco, Louisiana and carry 110,000 bpd initially, with the ability to expand to over 200,000 bpd.

Kinder Morgan is partnering with large independent U.S. refiner, Valero Energy Corp to build the pipeline, which is expected to be in service by mid-year 2013.

(Reporting By Janet McGurty; Editing by Alden Bentley)