PBF Holding Company L.L.C. announced Wednesday it will spend $1 billion to upgrade its Delaware City, Del., refinery to produce ultra-low sulfur distillates, which includes diesel, heating oil and jet fuel.

The PBF Clean Fuels Project, which will take three years to complete, involves the installation of equipment that strip 99 percent of the sulfur content from heavy crude oil, which is less expensive than sweet crude.

The new equipment can also refine material supplied from PBF's refinery in Paulsboro, N.J. PBF bought the two refineries in 2010 from Valero Energy Corp.

"We see this as an opportunity to upgrade to more higher-value products," said Michael Gayda, president of PBF Energy, which is based in Parsippany, N.J.    - Andrew Maykuth