NEW ORLEANS, Jan 11 (Reuters) - A major U.S. sugar refinery shut down by Hurricane Katrina in 2005 is considering constructing a levee of its own to protect the facility from future storms, the refinery's manager said on Thursday.

American Sugar Refining Inc.'s Chalmette refinery, situated on the banks of the Mississippi River in St. Bernard Parish just east of New Orleans, was swamped with two to five feet of water and shut on August 29, 2005. It 98 days to restart the refinery and all of its equipment had to be replaced.

Plant manager Pete Maraia told Reuters that one of the things the company is studying is to "put a levee around this plant. It's up for discussion. There's a lot of issues ... it's been talked about at the highest levels," he said.

Maraia said the cost of such a protective barrier would probably range from $4 million to $5 million.

The proposal is being seriously considered because the company can ill-afford having the refinery shut again by a weather disaster. The refinery has elevated some of the equipment in the plant to protect it from any new flooding.

The refinery has a daily capacity of 6.5 million pounds of sugar. Some 72 percent of what is processed is from Louisiana, with 22 percent from Texas and the rest from Florida.

Louisiana is the second biggest sugar producer in the United States. According to the monthly supply/demand report of the U.S. Agriculture Department, Louisiana is projected to produce 1.42 million short tons of sugar in 2006/07, up from the hurricane-damaged crop of 1.19 million tons in 2005/06.

Of that total, Maraia believes the Chalmette refinery handles between 1 million and 1.1 million tonnes.

Florida is the top sugar producer in the country, turning out 1.73 million tons in 2006/07, the USDA said. Texas sugar production stands at 198,000 tons.

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