How could God create Satan?

According to Christian tradition, He did not. Satan was originally Lucifer, a good angel. In fact the name Lucifer means "light-bearer". Lucifer was at one time, God's right hand man. However, through his own pride and envy, Lucifer rebelled against God and was cast out of heaven. The rebel angels who joined (1/3 of the host) was also thrown out.

Lucifer fell by his own evil will. I would seem Satan and the angels also had the choice of choosing God or not. They chose not, and was cast out of God's presence.

Today, humans are faced with the same choice, via their own freewill. They can choose God or not. If not, they too will be cast away from God.

However, there is good news. Unlike the angels, we have a redeemer, who is Christ Jesus. He paid a high price, that we can choose Him, and stay with God.