CHICAGO — Whiting, Ind., will remarket $200 million of environmental facility revenue bonds as early as Tuesday on behalf of BP Products North America Inc., which operates its second-largest refinery in the northwest Indiana town.

The bonds were originally issued Dec. 3, 2009, in a flexible-rate mode with a term of up to 270 days.

The bonds mature in 2049. Proceeds from the sale were used to finance construction of solid-waste disposal facilities at the refinery, which is in the midst of a massive $3.8 billion expansion.

This week’s transaction will convert the debt to a fixed-rate mode starting on April 1.

The outstanding debt features a mandatory tender upon conversion.

The finance team is also considering shortening the maturity on the bonds by up to 10 years. As of Monday, the team expected to price the bonds Tuesday. The bonds are not subject to the alternative minimum tax.

Goldman, Sachs & Co. is the remarketing agent and Chapman and Culter LLP is bond counsel. The bonds are secured by BP, and not by a mortgage on or a security interest in the project.

BP originally borrowed the money for building and improving industrial sewage and solid-waste disposal facilities at the Whiting refinery.

BP began work on the refinery expansion in early 2008 with plans to complete it in 2011. Company officials were not available for comment by press time.

The project will allow the energy giant to refine Canadian heavy crude oil, shifting some of its reliance from Middle East oil to Canadian crude.

The expansion will allow BP to process an additional 260,000 barrels of Canadian oil daily and will boost its gasoline and diesel-fuel refining capacity by 15%, or 1.7 million gallons a day.

The cost of the pollution-control piece of the expansion could account for up to $1.4 billion of the total $3.8 billion project, according to BP. Officials say the project is the largest private investment ever made in the state of Indiana.

Whiting, located 20 miles outside Chicago, issues bonds on behalf of BP as part of a state program administered by the Indiana Finance Authority that allows municipalities to issue tax-exempt bonds on behalf of manufacturing and industrial companies located in their ­districts.

Under Internal Revenue Service rules, the bonds must finance pollution-control projects in order to qualify for a tax exemption.

BP’s northwest Indiana presence covers Whiting, Hammond, and East Chicago. With a population of only 5,000, Whiting is dominated by BP — 55 cents of every city property tax dollar collected comes from the company.

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