UPDATE 2-BP says upgraded Whiting CDU set to start by end-June

* Work on other units to continue into second half of year (Adds refinery details from IIR Energy report, Brent-WTIlevels)

HOUSTON, June 6 (Reuters) - BP Plc said Thursday anupgraded crude distillation unit at the center of a $4-billionrevamp of its 405,000 barrel per day (bpd) Whiting, Indiana,refinery is on schedule to start up by the end of June.

"It's on schedule to start by the end of the secondquarter," said BP spokesman Scott Dean.

It is the first time BP has offered a time frame forstarting the CDU, called Pipestill 12. Previously, the companyhas said the re-fit of the Whiting refinery would finish sometime in the second half of the year.

Work on other units will continue into the second half ofthe year.

Dean did not specify a time frame for when in June the CDUwould begin returning to production.

On Wednesday, traders said a report by IIR Energy, sayingthe CDU was in cold-start mode and that feed into the unit wouldbegin late that day or early Thursday sent Brent oil futurestumbling relative to U.S. crude. Start up of the unit was seenon Thursday or Friday, and the CDU was expected to begincommercial production by June 9, IIR Energy said.

Trade sources said the report caused the Brent-WTI crudespread to narrow toward $9 a barrel in afternoon activity justahead of Wednesday's settlement. On Thursday, Brent's premium toWTI narrowed further, and was trading at $8.75 a barrel at 11:35a.m. EDT (1535 GMT).

Sources familiar with refinery operations have told Reutersthat Pipestill 12 is likely to start up late in June.

BP shut Pipestill 12 in November as part of a $4 billionupgrade to revamp the refinery to process 350,000 bpd of crudefrom Canada's tar sands oil fields in Alberta. Currently, therefinery can process 80,000 bpd of Canadian crude.

Two other crude distillation units have remained inoperation at the refinery while Pipestill 12 has been shut. ACDU does the initial refining of crude oil coming into arefinery and provides feedstock for all other units. (Reporting by Erwin Seba; Editing by John Wallace, DavidGregorio and Bernadette Baum)