* Affected residents being notified door to door
* Floodwater diversion threatens crops, rural population (Adds spillway opening Saturday evening)
By Kathy Finn
NEW ORLEANS, May 13 (Reuters) - Authorities will start opening a key spillway by early Saturday evening to relieve the swollen Mississippi River and avoid flooding Louisiana's two largest cities although potentially swamping thousands of homes and acres of crops.
Louisiana state officials said in a statement at 5 p.m. CDT (2300 GMT) on Friday that the U.S. Army Corps of Engineers would open the Morganza Spillway "during the next 24 hours."
Christina Stephens, a spokeswoman for Louisiana's office of homeland security, said officials in affected areas were going door to door to notify residents in areas likely to be flooded by diverted waters.
The opening of the spillway will channel Mississippi River water toward homes, farms, a wildlife refuge and a small oil refinery in the Atchafalaya River basin to avoid flooding Baton Rouge, the state capital, and New Orleans, which was badly flooded during Hurricane Katrina in 2005..
It would be the first time the spillway, 45 miles (72 km) northwest of Baton Rouge, had been opened in nearly 40 years.
Angela Ellis, whose home is across the street from an Atchafalaya River levee in Krotz Springs, a town of about 1,150 people, said before the Corps announcement that she aimed to evacuate with her husband and toddler by Monday. She said other residents talked of riding it out.
"They can do what they want, but I can't take that chance," she said.
Louisiana Governor Bobby Jindal had already told residents in affected areas to start leaving their homes because it was "extremely likely" the spillway would be opened Saturday or Sunday. He also said the state had plans with the American Red Cross to provide shelters for evacuees.
Flooding could reach 20 feet (6 metres) in the Atchafalaya basin.
About 2,500 people live inside the floodway, and 22,500 others, along with 11,000 buildings would be affected by backwater flooding when the Morganza is opened. Backwater flooding is water pushed back into streams and tributaries that cannot flow as normal into what will be an overwhelmed Atchafalaya River.
Some 18,000 acres (7,300 hectares) of cropland could be flooded.
"We always felt like there may come a day that it may happen," said Martin Frey, a farmer in Morganza, the site of the spillway.
Frey farms 1,600 acres (650 hectares) inside the spillway, including 450 acres (180 hectares) of rice that had just begun to grow. Anticipating the high water, he pulled irrigation wells and motors.
"Now I have a crop sitting out there ready to die because we have no rain and can't pump water. That's about as disheartening as knowing that all of that's going to be under 15 or 20 feet (4.5 to 6 metres) of water soon," Frey said.
The Corps said the gradual opening of the Morganza spillway's gates would prevent an immediate rush of water. Alon USA Energy (ALJ.N) said it expected its 80,000 barrel-per-day refinery in Krotz Springs to be surrounded by water within 10 to 14 days of the spillway being opened.
Crews were building a second levee at the refinery to shore up existing levees. The plant could face supply disruptions or have to shut down during flooding after the spillway opens.
Earlier this week, the Corps issued maps showing that New Orleans, Baton Rouge and other cities along the Mississippi would be inundated if the spillway were not opened.
In addition to threatening densely populated areas, lower Mississippi flooding could force shutdowns of as many as eight refineries and at least one nuclear power plant alongside the river.
The refineries make up about 12 percent of the nation's capacity for making gasoline and other fuels.
Thousands of residents in towns along the Mississippi River from Illinois to Mississippi have been evacuated in recent weeks after the river overflowed its banks, fed by heavy spring rains and large snow melt from a stormy winter. (Additional reporting by Erwin Seba and Kristen Hays in Houston; Editing by Peter Cooney)