Dresser-Rand Company plans to build a new headquarters and technology research and development facility in Olean, and add 120 new jobs.

The Empire State Development Corp., meeting in Buffalo on Wednesday, approved a $2 million grant for the project.

The JOBS Now grant, which the state agency said was “crucial in the company’s decision to invest in New York rather than another state,” will enable the company to build a modern, efficient, 86,000- square-foot facility on 11 acres in the Cattaraugus County city.

That will help it remain productive and recruit “top talent.” The company expects to retain 552 jobs in addition to the 120 new positions. The total project cost is $14,768,413.

Dresser-Rand supplies energy conversion technology to clients such as Royal Dutch/Shell Plc and ExxonMobil Corp. in 26 countries, and employs more than 2,300 across the Southern Tier, including 1,200 in Cattaraugus County.

The money was part of nearly $6.4 million in grants approved by the state agency’s board on Wednesday, designed to retain 976 jobs and create more than 170 new ones. It was the largest grant awarded to a private company.

The agency’s regular meeting was attended by Gov. David A. Paterson, who was in town to announce 300 new jobs coming to GEICO Corp. in Amherst. This was the first visit by a governor to an ESDC meeting since Gov. Cuomo in 1991.

Responding to a question by board member Mark Hamister, Paterson said he was interested in seeing low-cost hydropower better used for economic and job development, and that there were legislative proposals he saw merit in.

“I can’t say which idea I like the most, but it would be an additional tool in ESDC’s economic tool box, and it is something that we might be able to execute in as reasonable a period as possible,” Paterson said.

News Staff Reporter Mark Sommer contributed to this report.