HOUSTON, Sept 13 (Reuters) - The worst-case scenario of damage from Hurricane Ike did not occur, Texas Gov. Rick Perry said hours after the storm slammed ashore early on Saturday, carrying with it a wall of water that flooded hundreds of miles (km) of coastline.

"Fortunately the worst-case scenario that was spoken about, that was projected in some areas did not occur, particularly in the Houston Ship Channel," Perry told a briefing in Austin, Texas, monitored on local television.

Ike, a massive hurricane that idled more than a fifth of U.S. oil production, came ashore at the barrier island city of Galveston as a strong Category 2 storm at 2:10 a.m. CDT (0710 GMT) with heavy rains and sustained 110 mph (175 kph) winds, the National Hurricane Center said.

Before the storm, U.S. and state officials had worried about a 20-foot (6-metre) wave that could inundate the barrier island city of Galveston and pour inland into the Houston Ship Channel, lined on both sides by refineries and petrochemical plants.

"Rather than 20-foot surges (we had) 14- to 15-foot (4.3- to 4.5-metre) surges," Perry said.

For that reason, Port Arthur, a major port and oil refining city east of Galveston that was severely damaged by Hurricane Rita in 2005, was spared substantial disruption, he said.

"The good news is that the surge was nowhere near as large as we thought it was going to be from the standpoint of impact. But there's plenty of damage out there," Perry said.

The causeway that is Galveston's only link to the mainland has buckled and the island is covered with debris -- downed palm trees, upended boats, trash, building materials and 17 collapsed buildings.

More than half the city's 60,000 residents fled, but the fate of those who stayed to ride out the storm remained unclear.

David Paulison, administrator of the Federal Emergency Management Agency, said more than 120 people had been rescued in Galveston so far. (Reporting by Chris Baltimore and Anna Driver; Editing by Xavier Briand)

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