Oman: Cyclone kills two, halts oil and gas in Oman

* All LNG trains in Oman to be shut down-Oman LNG spokesman

* Phet forecast to hit Pakistan coast as tropical storm

(adds rough weather affecting UAE's Fujairah port, paragraph 9)

By Saleh al-Shaibany

MUSCAT, June 4 (Reuters) - Cyclone Phet, despite weakening to a Category 1 storm, pummelled Oman's coastline on Friday, killing two and halting the small oil-producing country's oil and gas production, officials and state media said.

Phet's first confirmed casualties were an Omani man who died trying to cross a flooded area in Oman's northern al Dhahira region and a Bangladeshi woman who was electrocuted in Qurayyat village near the capital Muscat, state television said.

"Some of the rescue operations are being hampered by poor visibility and strong winds," inspector general of police and customs Malik bin Suleiman al-Maamary said on Omani television. "There is bound to be damage but it is too early to assess it."

Oman's meteorological office said that wind speed was 120 kph near the Omani island of Masirah, and the cyclone was expected to move away from Oman on Saturday, leaving the country relatively unscathed compared to Phet's predecessor.

"This is not as bad as (Cyclone) Gonu and people are better prepared," said Ali Rashid, a resident of the capital Muscat.

Cyclone Gonu, which battered the country in 2007, killed 54 people swept away by flood waters in Oman and Iran.

Despite Phet's downgrade from a Category 3 to a Category 1 on Friday, the cyclone brought fierce, heavy rains with winds peaking at 138 kph (86 mph).

"I saw two cars dive into the valley one after another as the drivers tried to go around a bend," Mustafa Suleiman, of the eastern al-Ashkharah region, told Reuters.

OIL AND GAS PRODUCTION HALTED

In the United Arab Emirates' eastern Fujairah port, Phet brought bad weather and rough seas, the port's central command office said. Fujairah is one of the world's biggest operations for bunkering, the process of supplying a ship with fuel.

"The port is not officially closed, it is up to the master of a vessel whether or not to bunker now," an official from the port's central command said, adding that only a few ships had come to the port to load.

The latest storm path forecast on tropicalstormrisk.com shows Phet downgrading to a tropical storm before it hits the Pakistani coastline near Karachi.

Pakistani authorities had already evacuated nearly 1,000 people and were on standby for more. In a worst-case scenario, up to 50,000 people could be affected on Pakistan's coast, said Commander Salman Ali, a spokesman for Pakistan Navy in Karachi.

Oman halted its oil and gas production due as Phet hit the small country's coast, but no facilities have been damaged, DPO and Oman LNG spokesmen said.

"We won't load any oil because no ship is able to anchor at our facility due to rough seas," said a spokesman for state-controlled Petroleum Development Oman (PDO), an affiliate of Royal Dutch Shell <RDSa.L>.

Phet hit Sur, where Oman's three LNG production facilities, known as trains, are located, but no damage has been reported. Oman produces around 8 million tonnes of LNG per year.

Oman LNG shut down one train on Thursday and was shutting down its remaining trains on Friday, Oman LNG spokesman Nasser al-Kindy said, adding that Qalhat LNG, which supplies Spain and Japan, would also be shutting down its trains.

Omani state television said heavy rains were expected on Friday in Muscat, located near the port of Mina al-Fahal, where Oman's crude is exported. But Busaidy said the port had not been damaged. "The Mina Fahal exporting facility is fine," he said. (Writing by Erika Solomon; editing by Alison Williams)