Severstal unit to get US loan for auto steel

* Russian US unit to get up to $730 mln in financing
* Energy Dept. loan part of advanced technology program

WASHINGTON, July 12 (Reuters) - The Obama administration was set on Wednesday to award a loan of up to $730 million to steelmaker Severstal North America to help auto companies produce more fuel-efficient cars and trucks.

Severstal, which could not be reached for comment, applied for financing to expand its Dearborn, Michigan, facility for making lighter and stronger steel.

A source familiar with the Energy Department decision said the award to the wholly owned subsidiary of Russia's OAO Severstal (CHMF.MM: Quote) is part of an agency program that has approved more than $8.4 billion in auto-related financing since 2009.

It would be the DOE's largest loan of its kind in nearly two years.

Previous recipients include Ford Motor Co (F.N: Quote), Nissan Motor Corp (7201.T: Quote), Fisker Automotive Inc and Tesla Motors Inc for more efficient gasoline engines, gasoline-electric hybrids and full electric car development.

The source said the project is expected to create more than 200 permanent jobs and 2,500 construction jobs, an urgent priority for the Obama administration fighting to demonstrate that its economic policies are creating jobs.

Automakers are fast leveraging materials and other technologies to meet new U.S. government fuel-efficiency requirements and consumer demands for vehicles that save them money at the pump.

The Energy Department program was approved by Congress to also reduce U.S. dependence on imported oil.

Chrysler, which is under management control of Fiat SpA (FIA.MI: Quote), is seeking $3.5 billion in Energy Department advanced technology loans. That bid remains on track, officials have said.

General Motors Co (GM.N: Quote), which like Chrysler received a government bailout and restructured in bankruptcy, withdrew its loan application this year after deciding to finance vehicle efficiency programs on its own.