Chevron USA Inc., a subsidiary of Chevron Corp., said Monday it plans to build a gasoline production unit at a Mississippi refinery.

Gasoline production is expected to increase by about 10 percent, or about 600,000 gallons per day. The new unit will improve equipment reliability and utilization, while allowing the refinery to optimize product yields, Chevron said.

Construction of the continuous catalyst regeneration project in Pascagoula, Miss. is scheduled to begin in early 2008 and be completed by mid-2010, Chevron said.

The project will create about 700 construction jobs and cost about $500 million, Chevron said.

The new unit will replace two process units built more than 30 years ago. Crude oil capacity at the refinery will remain the same, Chevron said.

Chevron shares rose 86 cents to $92.27 in afternoon trading.