Valero to run new ethanol plants full throttle

*Valero will trade ethanol and corn in San Antonio

*Refiner will keep 435 ethanol jobs and add a few more

By Timothy Gardner

NEW YORK, April 2 (Reuters) - Top U.S. oil refiner Valero Energy Corp (VLO.N), the recent buyer of seven ethanol plants, said it will run them at full capacity despite poor average margins for making the alternative motor fuel.

"Because of the amount of ethanol we are required to buy for blending in gasoline, it makes sense for us to produce the ethanol," Bill Day, a spokesman for Valero, said in an interview. He did not say exactly when the plants would be at capacity, citing the fact that it has yet to complete the purchase on a few of them.

Valero will also trade corn and ethanol, hoping its experience trading crude oil, gasoline and diesel will help it avoid difficulties that bankrupted the company from which it bought the distilleries.

The refiner bought the plants from VeraSun Energy Corp VSUNQ.OB at an auction last month for about $477 million, and will pay about $537 million in total to cover working capital and other costs.

VeraSun declared bankruptcy late last year after locking in pricey contracts for corn, the main feedstock for U.S.-made ethanol.

Day said Valero will take a fresh approach. "We bought hardware -- not contracts."