Valero Energy Corporation (www.valero.com) yesterday reported its first quarter 2009 net income of $309 million, or $.59 per share.

Valero, which entered the ethanol business by agreeing to buy seven ethanol plants from VeraSun Energy Corporation on April 1, closed on six of the plants and one development site this month and expects to close on the last plant soon.

In an earnings conference call yesterday, Bill Klesse, Valero’s chairman of the board and CEO, said that acquiring VeraSun’s assets at a time of low ethanol margins “enabled us to pay only 30% of replacement cost for some of the industry’s best ethanol plants.” Valero selected the plants for their size and access to local feedstocks.

The acquisitions will allow Valero to produce 780 million gallons of ethanol annually, or about 50,000 gallons of ethanol per day. Kleese said that the company expects ethanol demand to grow under the federal mandate and to catch up with production capacity by 2010.