Wires

UPDATE 1-Chevron's Richmond refinery CDU shut for rest of year

* Announcement matches worst-case forecasts for outage

* Motor fuel output cut by at least half since fire

* Richmond outage cut Chevron's 3rd quarter 2012 output

(Adds details, background.)

HOUSTON, Oct 9 (Reuters) - Chevron Corp said onTuesday the central crude oil refining unit at its 245,000barrel-per-day (bpd) Richmond, California, refinery would remainshut for the rest of the year.

The announcement of a shutdown lasting about five monthsconfirms worst-case scenario forecasts for the outage, whichsources familiar with operations at the refinery and industryanalysts had said would extend between three and six months fromthe Aug. 6 fire which shut the CDU.

The San Francisco Bay-area refinery's production of motorfuel has been cut by at least half since the blaze, makingCalifornia gasoline wholesale and retail markets volatile.

Wholesale prices shot up 97 cents last week, when a LosAngeles-area refinery was hit by a power outage. Retail priceshave hit a record $5 a gallon in some locations.

Chevron said the shutdown has already affected production.

"During the first two months of the third quarter, U.S.refinery crude-input volumes decreased by 92,000 barrels per daycompared to the second quarter, largely reflecting the shutdownof the Richmond refinery crude unit," Chevron said in an interimupdate to investors on the third quarter.

"The Richmond crude unit is expected to remain offlinethrough the fourth quarter of 2012."

The fire, which erupted from a pipe on the crude unit, isbeing investigated by federal and state agencies. As many as15,000 people in the San Francisco Bay area claim to have beenaffected by the smoke released by the fire.

A crude distillation unit does the initial refining of crudeoil coming into a refinery and produces feedstocks for all otherunits.

(Reporting by Erwin Seba.; Editing by Jim Marshall and AndreGrenon)

((erwin.seba@thomsonreuters.com)(713 210 858)(ReutersMessaging: erwin.seba.reuters.com@reuters.net))

Keywords: REFINERY OPERATIONS/CHEVRON RICHMOND