LNG prices under sustained pressure-IEA

* LNG market looks oversupplied in mid-term

* IEA likely to trim long term energy demand forecast

* Oil supply crunch looms

Oversupply is likely to keep downward pressure on liquefied natural gas (LNG) prices, threatening a possible supply crunch after 2015, the International Energy Agency''s chief economist said in early July.

Prices paid for spot cargoes of super-cooled gas have plunged from over $20 per million British thermal units when supplies were tight before the global economic slowdown to around $4 in mid 2009.

While oil prices have doubled since hitting a near five-year low of $32.40 in December 2008, LNG prices are likely to remain low because of sagging demand and a surge in new production.

"I''m afraid it will be the case because most of the LNG plants now are being built with the intention of providing gas to the United States," Fatih Birol told Reuters in an interview.

"But in the United States we have seen a shale gas boom and therefore their needs are much less and there may be a gas glut which may put pressure on prices."

Facing the first fall in global gas demand for over 50 years, U.S. self-sufficiency, and a surge in production over the next few years, major gas producers met in Qatar last month to discuss ways to stabilise the market.

Unlike the oil market, which faces a looming supply crunch if producers stall new projects over uncertain demand, the LNG market is likely to remain comfortably supplied until 2015, keeping pressure on prices to the benefit of consumers.

"But we may see a problem after that, especially with the fact that there is a new forum of global gas exporting countries which may also bring some new dimensions to the debate," Birol said.

DEMAND OUTLOOK The Paris-based agency, which advises many of the world''s biggest economies on energy policy, is likely to revise down its annual forecast for long-term energy demand in November.

"Given the fact that we are going through these difficult times I would expect that our numbers will reflect this economic downturn, compared to last year when we had our projections," he said, declining to give details.

"It is not only economic growth, some of the major consuming countries put new policies in place in order to improve energy efficiency."

Despite climate change driven energy efficiency moves in Europe and the United States and energy cost-cutting in China, demand for oil will still rise when the economy rebounds, Birol said.

"We need to bring on new production in order to compensate the decline in the existing fields and second in order to increase production to meet the growth in demand," he said.

"So even if demand growth between now and 2030, for example, was zero, which is very pessimistic, we have to find 45 million bpd of new production in the next 20 years. That means finding four new Saudi Arabias to produce."

Source: Reuters