Spill closes Miss. River, shuts off exports

BELLE CHASSE, Louisiana (Reuters) - The largest petroleum spill to hit the Mississippi River since 2005's Hurricane Katrina snarled ship traffic on Thursday from New Orleans to the Gulf of Mexico and brought flows of grain and other key exports to a standstill.

The day after a ship collision shut down a 97 mile stretch of water, the river was a traffic jam of about 100 ships waiting to move along the vital link to Midwest grain elevators, coal terminals and other industrial facilities, Coast Guard officials said.

"Think in terms of days for the opening and think in terms of weeks for the cleanup," said Captain Lincoln Stroh of the U.S. Coast Guard. "Think in terms of weeks for the cleanup."

The river is a vital link carrying grain from production areas in the Midwest to export markets abroad. Between 55 and 65 percent of all U.S. corn, soybean and wheat exports leave from the Gulf of Mexico.

Officials deployed an armada of ships to contain the spill, a floating scrim of 420,000 gallons (1,590,000 liters) of No. 6 fuel oil that threatened to contaminate the area's drinking water.

"We still have a huge amount of oil moving down the river," Stroh told reporters at a news conference.

Cleanup crews are working to clear spilled oil from the center of the river and open a shipping lane there, he said.

The spill happened early Wednesday when the tanker Tintomara, owned by Whitefin Shipping Co of Gibraltar, hit an American Commercial Lines barge being pushed by the tug Mel Oliver.

The 600-foot tanker, carrying styrene and biodiesel bound for Europe, split the 190-foot barge in half, dumping the fuel. The tanker was not seriously damaged, a spokesman said.

The Coast Guard continued to look into a report that the tugboat crew was not properly licensed, a spokesman said.

EXPORT FREEZE

A spokesman for Minneapolis-based Cargill, the world's largest grain exporter, expressed hope the shutdown will be short.

At the Port of South Louisiana, largest in the area, barges could still arrive from the U.S. heartland but ships headed out to the Gulf of Mexico and foreign ports were "essentially frozen," a person familiar with operations said.

The spill was the largest in the area since Hurricane Katrina in 2005 collapsed oil tanks at an area refinery, and Louisiana officials said it was the largest in the river since a tanker ran aground southeast of New Orleans in 2000.

A major coal shipping terminal south of New Orleans, United Bulk Terminal, which sends coal to other parts of the United States and overseas, declared force majeure on deliveries.

No wildlife impact had been reported yet, but the Louisiana Department of Environmental Quality was monitoring, spokesman Rodney Mallett said.

New Orleans' drinking water appeared to be safe, officials said. Arrangements were being made to accommodate suburbs where freshwater intakes had to be temporarily closed.

The tanker and the floating halves of the barge remained near the site of the accident, but salvage operations on the vessels were expected to begin soon, the Coast Guard said.

Coast Guard officials were working to prioritize shipments, and "refineries are high on the list," Stroh said.

Three refineries are located in the area of the spill along with two major coal-loading terminals, United and one operated by Kinder Morgan. There were no reports of impacts on the refineries.

The refineries are operated by ConocoPhillips, Murphy Oil and Chalmette Refining LLC, a joint venture between Exxon Mobil and Venezuelan state oil company PDVSA.

"We get most of our crude via pipeline, so that means that we can operate without issues for a couple of days," said ConocoPhillips spokesman Bill Graham.

(Additional reporting by Bruce Nichols in Houston, Janet McGurty in New York and K.T. Arasu in Chicago; Editing by Chris Baltimore and Christian Wiessner)