UPDATE 1-Progress delays Fla nuclear unit return

* Return of nuclear unit delayed from third quarter

* More time needed to replace damaged concrete

(Updates throughout with company comment, cost of outage)

HOUSTON, Aug 6 (Reuters) - Progress Energy Inc (PGN.N) officials on Friday said the return of the 838-megawatt Crystal River nuclear unit in Florida will be delayed until the fourth quarter.

Progress Energy Chief Executive Officer Bill Johnson said more time is needed to close a large hole created in the wall of the containment building after additional cracks were found. The company had said the unit would return in the third quarter.

Crystal River shut in September 2009 to refuel and replace its steam generators, tasks expected to keep the unit shut for about three months.

About a month into the work, contractors found a gap in the 42-inch (107 cm) thick containment building wall which was opened to allow removal and replacement of the giant steam generators.

After other work was completed, concrete work to close the 55-by-25 foot (16.8 by 7.6 metre) hole began in early July.

"It's time-consuming and precise work," Johnson told investors and analysts on a call. "We need to take the time to do it right."

Progress said it has spent $79 million on repair costs to date and $166 million on replacement power. Some of those costs will be covered by insurance and the company expects to seek recovery of other costs from ratepayers.

After months of study, Progress determined that the gap in the wall was caused by the initial work to release structural cables and other work to open the wall.

The 3,151-MW Crystal River station, located in Red Level, Florida, about 85 miles north of Tampa, includes four coal units and the nuclear reactor.

Progress Energy operates the reactor and has a 92-percent ownership stake. Minority owners include 10 public power agencies.

(Reporting by Eileen O'Grady; Editing by Marguerita Choy)