UPDATE 1-CVR: Full pipeline forced refinery run cuts

* Magellan Pipeline inventories restrict shipments

* CVR cut crude runs at Kansas refinery to compensate

* Midwest refined product stocks higher than average

By Kristen Hays

HOUSTON, Feb 28 (Reuters) - Independent refiner CVR Energy Inc had to reduce crude runs at its Kansas refinery in January and February because levels of refined products in a key U.S. Midwest pipeline were "very high," company CEO Jack Lipinski told analysts on Tuesday.

He said product inventories in the Magellan Pipeline "at least began the year at very high levels," and lacked enough space for product shipments from CVR's 115,700 barrels-per-day (bpd) refinery in Coffeyville, Kansas.

Midwest refineries have been running nearly full out, with light spring maintenance planned, to capture profits from low differentials for Canadian and Bakken crude oil. Such high utilization generated a glut of refined products in a region where there is little means to ship fuels to other markets.

Midwest gasoline stocks were 3.75 percent higher than the five-year average in the first seven weeks of 2012, while distillate stocks were 5 percent higher, according to the U.S. Energy Information Administration.

Unable to get all of its output on the pipeline, CVR cut Coffeyville's crude runs, Lipinski said during the company's fourth-quarter 2011 earnings call. He did not say by how much.

"For those of you who closely follow the Midcontinent, this is not a once in a lifetime event," Lipinski said. "It actually occurs every two or three years."

Bruce Heine, spokesman for Magellan Midstream Partners, said refined product inventories were "above our annual average, but generally the same as this time last year."

Lipinski also noted that the Chicago "seems to be suffering worse than we are." Chicago gasoline differentials saw wild swings this month as the product glut further pressured already seasonally depressed differentials.

Lipinski added that inventory levels on the pipeline "will improve as they always do" when agricultural demand rises in the spring.

CVR TO RESPOND TO ICAHN OFFER

Lipinski briefly addressed billionaire investor Carl Icahn's $30-per-share tender offer for the company, saying CVR would formerly respond in a regulatory filing with the U.S. Securities and Exchange Commission within 10 business days.

Icahn Partners LP two weeks ago launched the unsolicited offer, which values CVR at about $2.6 billion. Icahn, CVR's largest shareholder with a 14.5 percent stake in the company, said in a regulatory filing that the company was undervalued and would benefit from being sold to a larger refiner that could better capture benefits of cheap Midwest crude.

Regarding operations, Lipinski said a planned turnaround was "just beginning" on Tuesday at the Coffeyville refinery. The work, involving a crude vacuum unit, coker, hydrotreater and associated equipment, will last 27 days, he said.

CVR also will conduct $80 million to $90 million in planned work during the fourth quarter this year at its 70,000 bpd refinery in Wynnewood, Oklahoma, which the company acquired for $525 million in December.

"We'll continue to update the market on the anticipated turnaround cost at Wynnewood as we finalize our project plan there," Lipinski said.

CVR shares closed down $1.80, or 6.1 percent, at $27.70 Tuesday on the New York Stock Exchange.