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UPDATE 1-Oil slick to hit U.S. coast on Friday

(For a TAKE A LOOK on the spill, click [ID:nN29189680])

* Slick to hit U.S. southern coast on Friday

* BP says welcomes Defense Department offer of help

* Coast Guard says leak five times bigger than thought

* BP shares drop as investors fear cleanup liability (Recasts with U.S. officials, share impact)

By Chris Baltimore

HOUSTON, April 29 (Reuters) - A huge oil spill will hit the southern U.S. coast on Friday, the Coast Guard said on Thursday, and the U.S. military offered to help BP Plc contain the slick that threatens four states.

The spill was “of national significance,” Janet Napolitano, secretary of the Department of Homeland Security, told a news conference, adding the government will push BP to conduct the strongest possible effort to clean it up.

The state of Louisiana declared a state of emergency due to the accident, which the Coast Guard said late on Wednesday was spilling five times more oil than previously estimated.

Shares in BP BP.L and Swiss-based rig company Transocean Ltd RIGN.SRIG.N dived by more than 6 percent on Thursday as investors feared a significantly higher cleanup cost. BP is down more than 10 percent and Transocean is down nearly 14 percent since last week's rig explosion.

BP and the Coast Guard have already mounted what the London-based company calls the largest oil spill containment operation in history, involving dozens of ships and aircraft.

But they are struggling to control the slick from the leaking well 5,000 feet (1,525 metres) under the sea off Louisiana’s coast.

The slick will hit the coast in the Mississippi Delta “sometime later tomorrow,” Sally Brice O’Hare, rear admiral of the Coast Guard, said at the news conference with Napolitano.

Eleven workers are missing and presumed dead after last week’s oil rig disaster -- the worst in the United States in almost a decade. There are fears of serious damage to fisheries, wildlife refuges and beaches in Louisiana, Mississippi, Alabama and Florida.

Transocean’s Deepwater Horizon rig sank on April 22, two days after it exploded and caught fire while it was finishing a well for BP about 40 miles (64 km) southeast of the mouth of the Mississippi River.

The spill could also have major ramifications for proposals in Congress and by President Barack Obama for issuing new offshore drilling permits.

The Washington Post noted the spill was likely to “surpass the size of the 1969 Santa Barbara spill that helped lead to the far-reaching moratorium on oil and gas drilling off the Pacific and Atlantic coasts, a ban that Obama recently said he wants to modify.”

The leak from the well blowout is now estimated at 5,000 barrels per day or about 210,000 gallons (795,000 litres). (Additional reporting by Tabassum Zakaria in Washington; Editing by Pascal Fletcher and David Storey)