UPDATE 1-Valero approves St. Charles refinery expansion

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NEW YORK, Nov 6 (Reuters) - Valero Energy Corp (VLO.N) said Tuesday its board approved a $1.4 billion expansion project at its oil refinery in St. Charles, Louisiana, that would boost the plant's crude processing capacity and output of ultra-low-sulfur distillates.

"With ultra low sulfur diesel, we figure that is where the major amount of demand growth will be," said Bill Day, a Valero spokesman. "If you look at current demand trends and margins, distillates are outpacing gasoline."

The project, which is scheduled to be completed by 2010, includes a new 50,000 barrel-per-day hydrocracker plus 45,000 and 10,000 bpd expansions to the crude and coker units, respectively, Valero said in its earnings statement.

The St. Charles refinery currently has a crude processing capacity of 190,000 bpd and a total fuel throughput capacity of 250,000 bpd, the company said.