* Mexico's largest Pacific port closed
* Bud brings rains, overcast skies on coast
* No major oil installations in storm's path (Updates with details from port, storm position)
By David Alire Garcia
MANZANILLO, Mexico, May 25 (Reuters) - Hurricane Bud churned closer to Mexico's coast on Friday, shuttering a major Pacific port and schools as local officials expecting heavy rains and floods prepared emergency shelters.
The first hurricane of the 2012 season, Bud will hit the coast between the port city of Manzanillo and the tourist town of Puerto Vallarta later on Friday, the U.S. National Hurricane Center said. It weakened to a Category 2 storm overnight, packing winds of 100 mph (160 kph).
Heavy rains and gusts of wind whipped through Manzanillo and Mayor Rosario Yeme said the municipality was preparing space for 15,000 people if evacuations were needed.
"I am worried, but not scared. There is a lot of work to be done," Yeme said in Manzanillo, where she is coordinating with emergency services ahead of the storm's landfall.
Authorities shut schools in Manzanillo and several other towns on the Pacific coast.
Manzanillo port, which ships cars, cattle, metals and tequila to Asian and U.S. markets, was closed on Friday morning. The terminal handles about 9 percent of Mexico's cargo, also importing containers of manufactured goods.
Businessman Ruben Alamo expected port operations would resume by the weekend.
"The storm will affect imports and exports, but only minimally," said Alamo, a member of the local chamber of construction companies.
Mexico has no significant oil installations on the Pacific coast.
Last October, Hurricane Jova hit in almost the same area, causing at least four deaths and destroying infrastructure and houses in towns near the port.
Mid-morning on Friday, Bud was located about 105 miles (170 km) southwest of Manzanillo.
Mexico's government issued a hurricane watch along the coast from Punta San Telmo to Cabo Corrientes.
After hitting land, the hurricane is expected turn back around into the Pacific as a tropical storm by Saturday.
"Although continued weakening is forecast today, Bud is still expected to reach the coast of Mexico at or near hurricane strength," the center said in an advisory.
Bud could soak the states of Michoacan, Colima and Jalisco and southern Nayarit with 6 to 8 inches (15 to 25 cm) of rain.
In some places, the storm could dump as much as 15 inches (38 cm) of rain, threatening life-threatening flash floods and mudslides, the center said.
Most of Mexico's oil platforms and exporting ports are in the Gulf of Mexico and affected by storms in the Atlantic, where forecasters are expecting a "near normal" hurricane season this year with up to 15 tropical storms and four to eight hurricanes.
(Additional reporting by Michael O'Boyle in Mexico City; Editing by Doina Chiacu)