Convoy leads Canada fire evacuees through burning city to safety

(Updates with latest forecast of fire's growth and direction; 10 oil sand operators cut production)

By Rod Nickel and Liz Hampton

WANDERING RIVER, Alberta, May 6 (Reuters) - Convoys of evacuees stranded by a wildfire raging in and around the Canadian oil town of Fort McMurray made their way on Friday through the heart of the devastation on the only highway out of the region, as officials warned that the blaze could soon double in size.

Wind-whipped flames roaring through forests and brush parched by a spring heat wave have engulfed nearly 250,000 acres (101,000 hectares) in western Canada's energy heartland since erupting on Sunday.

The blaze, the largest of 40 wildfires burning across the province of Alberta, has forced some 88,000 residents, the entire population of Fort McMurray, to flee for safety, and has threatened two oil sands production sites south of the city.

At least 10 oil sand operators have cut production due to evacuations and other emergency measures that complicated delivery of petroleum by rail, pipeline and highway.

With winds on Friday pushing the fire's leading edge to the northeast, away from town and into open timber, authorities said the blaze was expected to rapidly expand its footprint even as the threat to populated areas waned.

Chad Morrison, an official with the Alberta government wildfire unit, told reporters in the provincial capital Edmonton, about 270 miles (430 km) to the south, the blaze was likely to double in size by late on Saturday, the end of its first week.

The full extent of property losses in Fort McMurray, has yet to be determined, but authorities said some 1,600 structures were believed to have been destroyed. One analyst estimated insurance losses could exceed C$9 billion ($7 billion).

Earlier in the week most evacuees headed south by car on Alberta Highway 63, the only land route out of the area, in a slow-moving exodus that left many temporarily stranded on the roadside as they ran out of gasoline.

But other residents who initially sought shelter in oil camps and settlements north of the city found themselves cut off in overcrowded conditions. They were forced on Friday to retrace their route back through Fort McMurray on Highway 63 as flames continued to spread.

With parts of the city still in flames, evacuees in some 1,500 vehicles began making the 30-mile (50-km) trip at 4 a.m. in groups of 50 cars.

"It reminded us of a war zone," said Marisa Heath, who spent 36 hours in her truck on the side of the highway with her husband, two dogs, a cat and seven kittens. "Eerie. All you could see was cement foundations of houses."