HOUSTON (Reuters) - The fire at Chevron Corp's 245,000 barrel per day Richmond, California refinery broke out in a key tower in the crude oil refining unit, halting its production, according to a California state agency.

Crude distillation unit No. 4 (CDU), the only one of its kind at the refinery, begins the process of turning crude oil into motor fuel in the atmospheric tower. The CDU supplies feedstock to all other production units, which are now using feedstock made before the fire.

The refinery is the second biggest in California and the CDU is expected to be shut for up to three months for repairs, West Coast refined products traders said on Tuesday.

A similar fire earlier this year at BP Plc's Washington state refinery lifted gasoline prices by more than $1 a gallon.

On Tuesday, the California Occupational Safety and Health Administration (Cal/OSHA), which is investigating the blaze, limited the preserving order around the site of the fire to the atmospheric tower and associated piping, according to an agency spokesman.

The preservation order keeps the site of the fire, which caused three minor injuries, intact for investigators and prevents injuries to those who might begin repairing the units.

"Chevron now needs to present a plan to address the structural safety issues of overhead pipes and walkways that were in or near the heat of the fire," said Cal/OSHA spokesman Dean Fryer.

"When that is approved they can start to remove and repair those items and then move to review the atmospheric tower for necessary repairs. There is no estimate on the amount of time this will take."

A Chevron spokesman declined to confirm damage to the atmospheric tower. "Unit 4 was damaged," said Chevron spokesman Lloyd Avram, referring to the entire CDU.

Sources familiar with operations at the refinery said they thought the six-hour blaze had caused extensive damage to the CDU that would take weeks to repair.

(Reporting by Erwin Seba; editing by Miral Fahmy)