UPDATE 2-Valero profit boosted by cheaper domestic oil

* Earnings of $1.88 per share beat Wall Street view of $1.18

* Shares rise more than 7 percent

(Adds estimates, background; updates share price)

Jan 29 (Reuters) - Valero Energy Corp reported a bigger-than-expected jump in fourth-quarter profit on Tuesday as the U.S. refining company's plants processed higher amounts of cheaper domestic crude oil.

Shares of Valero rose more than 7 percent to $41.85 before the start of regular trading.

Growing supplies of crude produced from shale formations in the United States have been a boon to refining companies, which are processing more and more of the less-expensive oil.

In the fourth quarter, Valero replaced all imported light foreign crude with cheaper domestic crude at it Gulf Coast and Memphis refineries, Chief Executive Officer Bill Klesse said in a statement.

Valero expects more lower-priced U.S. and Canadian crudes to become available, so the company is looking at options to increase the amount of those fuels it processes, Klesse said.

Fourth-quarter profit rose to $1.0 billion, or $1.82 per share, from $45 million, or 8 cents per share, a year earlier. Revenue at the largest U.S. independent refiner was flat at $34.7 billion.

Excluding a noncash asset impairment charge, Valero posted a profit of $1.88 per share. On that basis, Wall Street analysts on average had expected $1.18.

Valero's stronger-than-expected earnings were driven by all segments of its refining business, analysts at energy-focused investment bank Simmons & Co said in a note to clients.

(Reporting by Anna Driver in Houston, additional reporting by Krishna N. Das; Editing by Saumyadeb Chakrabarty, John Wallace and Lisa Von Ahn)