UPDATE 2-Houston ship traffic jam may last 36 hours -pilots

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HOUSTON, July 24 (Reuters) - Clearing the traffic jam of 60 ships waiting to enter or exit the Houston Ship Channel may take up to 36 hours, said the Houston ship pilots association on Thursday.

That's how long rough seas from Tropical Storm Dolly stopped traffic along the 53-mile (85-km) waterway to the busiest U.S. petrochemical port.

Shortly before 12 p.m. local time (1700 GMT), two deep-draft crude oil tankers moved up the ship channel. Pilots are now working down the backlog of 37 ships waiting to depart from Houston, said Houston Pilots Business Manager T.J. Nelson.

The traffic halt led top U.S. refiner Valero Energy Corp (VLO.N: Quote, Profile, Research, Stock Buzz) to cut back production at its Houston and Port Arthur, Texas, refineries between 10 percent and 20 percent on Wednesday.

Valero said it expects to restore full production by the end of the week at the refineries.

At least 23 ships are waiting to come into the channel, according to the U.S. Coast Guard.

The Houston Ship Channel supplies crude to eight refineries in Houston and Texas City, Texas, that account for 13.5 percent of national refining capacity.

High winds in the Gulf of Mexico continue to prevent ships from entering or exiting the Corpus Christi, Texas, ship channel, which supplies three refineries with a combined refining capacity of 784,000 bpd, the Aransas-Corpus Christi Ship Pilots Association. (Reporting by Erwin Seba; Editing by Christian Wiessner)