Katrina batters US Gulf Coast

Hurricane Katrina ripped into the US Gulf Coast yesterday, battering the historic jazz city New Orleans, swamping resort towns and lowlands with a crushing surge of seawater and stranding people on rooftops.

New Orleans, a bowl-shaped city that sits below sea level and has long feared catastrophic damage from a massive hurricane, took a powerful blow from Katrina's 216 kph winds when the storm came ashore from the Gulf of Mexico and roared along the coast into Mississippi and Alabama.

At least two oil rigs were adrift in the Gulf of Mexico, where Katrina raged through offshore fields as one of the strongest hurricanes on record. Fearing the worst from the 280 kph winds, oil companies shut down rigs and closed refineries along the coast, sending oil futures higher.

Katrina could become the most expensive storm in US history, costing insurers up to $26 billion, risk analysts said.

In the city known as the birthplace of jazz, the storm shattered high-rise windows, littered the streets of the historic French Quarter with debris and tore through the roof of the Superdome football stadium, where some 10,000 people had taken shelter when authorities ordered New Orleans evacuated.

But a late turn to the east may have spared the city the worst as its levee system appeared to be holding off the Mississippi River and Lake Pontchartrain. Officials said a breach occurred in nearby St Bernard Parish, where Katrina's eye passed and extensive damage was expected.

Louisiana Governor Kathleen Blanco said about 115 people were stranded on rooftops but rescue teams were not being sent until winds subsided. She said access routes to New Orleans would be shut down and told the hundreds of thousands of people who evacuated to stay away.

"I can't say that I have a sense we escaped the worst," she said. "We have a tough, tough people. We party hard, we work hard... we know we can get through this."

New Orleans Mayor Ray Nagin said he had reports that more than 20 buildings were collapsing in the city.

Katrina knocked out electricity to about 670,000 power company customers, or about 1.3 million people, in Louisiana, Mississippi, Alabama and Florida, utility companies said. That figure included more than 300,000 customers of New Orleans-based Entergy Corporation.

By 2 p.m. CDT (1900 GMT) Katrina's winds had decreased to 153 kph, a Category 1 storm, and its center was about 32 kilometres west-southwest of Hattiesburg, Mississippi, after it hammered the Mississippi coastal tourist havens of Biloxi and Gulfport.

"It came in on Mississippi like a ton of bricks. It's a terrible storm," Mississippi Governor Haley Barbour said.

Asked about his worst fear, Barbour said: "That there are a lot of dead people out there.

A Weather Channel producer in Gulfport, Mississippi, estimated a six-meter storm surge hit the area, sweeping away cars in the parking lot of a retirement home and said he was standing in about 15 centimetres of water on the second floor of the building.

The National Hurricane Center had said the exposed Mississippi coastline could expect 4.5- to 6-meter storm surges.

President George W. Bush yesterday approved "major disaster declarations" for the states of Louisiana and Mississippi.

Artist Matt Rinard, who owns a business in the French Quarter of New Orleans, holed up on the fifth floor of a Canal Street hotel and watched the storm roll in.

He said pieces of sheet metal and plywood, billboards and pieces of palm trees flew down Canal, which borders the Quarter, as huge gusts of wind blew through the city.

"It's blustery. You can see the speed of it now, it's unbelievable," he said. "The power went out about an hour and a half ago and so now I'm just watching the occasional person walking down Canal Street."

Officials said three people from a New Orleans nursing home had died during their evacuation to a Baton Rouge church.

New Orleans had not been hit directly by a hurricane since 1965 when Hurricane Betsy blew in, flooding the city. The storm killed about 75 people.

Katrina was making its second US landfall after striking southern Florida last week, where it caused widespread flooding and seven deaths.

The storm forced oil companies to shut down production from many of the offshore platforms that provide a quarter of US oil and gas output.

Shell said two of its oil drilling rigs under contract were adrift in the Gulf of Mexico. One rig is owned by Nobel, the other by Transocean Inc.

US oil futures jumped nearly $5 a barrel in opening trade to touch a peak of $70.80 before settling back.

Katrina could become the costliest storm in US history, exceeding the $20.9 billion of inflation-adjusted insurance claims from Hurricane Andrew, which hit Miami in 1992.

Air Worldwide Corporation of Boston estimated a $12 billion to $26 billion insurance payout for Katrina. Risk Management Solutions Incorporated of Newark, California, estimated damage of $10 billion to $25 billion.