Last week, I told you how petroleum company Valero Energy Corp. could be looking at getting into the biodiesel business (see my post from Sept. 11, 2009). Now, it looks like the company is doing more than just looking.

This story from the San Antonio Business Journal says Valero has teamed up with Darling International Inc. to develop an animal fat biodiesel plant in Louisiana:

San Antonio-based Valero and Irving, Texas-based Darling plan on building a biodiesel facility on a site adjacent to Valero’s St. Charles refinery near Norco, La. The facility will have the capacity of producing 135 million gallons per year. Proposed development costs were not disclosed.

The planned facility will convert grease — animal fats and used cooking oil supplied by Darling — to commercially viable renewable diesel. Valero is North America’s largest independent oil refiner. Darling is a food processing by-products recycling company. Darling recycles used restaurant cooking oil and by-products from beef, pork and poultry processers into usable products for the agricultural, leather and biodiesel manufacturing industries.

The companies are expected to apply jointly for a U.S. Department of Energy backed loan from an $8.5 billion fund that promotes energy efficiency and renewable energy.