(recasts with statement from Exxon)
Sept 11 (Reuters) - Exxon Mobil Corp is planning to spend more than 500 million pounds ($650 million) to upgrade the UK's largest oil refinery, Fawley, on England's south coast, a spokesman said on Tuesday.
The project at the 270,000 barrel per day refinery - representing a fifth of British refining capacity - still needs a final investment decision which is not expected before the second quarter of next year, Exxon said.
The planned upgrade, which would include building a new hydrotreater and a new hydrogen plant, would reduce Britain's reliance on diesel imports.
"ExxonMobil is considering significant upgrades at its Fawley site to help meet demand in the UK market for high quality fuels," Exxon said in a statement.
"If approved, the project, which is expected to involve an investment of hundreds of millions of pounds, will ... allow the site to process a wider selection of crude oils, and will help secure future employment for 1,000 employees at the site."
A spokesman confirmed a report in the Financial Times that the investment, if finalised, would amount to more than 500 million pounds.
The upgrade will allow the refinery to refine heavier, sourer barrels into ultra-low sulphur diesel, the FT reported.
($1 = 0.7692 pounds) (Reporting by Debroop Roy in Bengaluru and Shadia Nasralla in London; Editing by Shounak Dasgupta and David Evans)