UPDATE 1-Australia sees surging LNG exports, strong demand

* Australia LNG forecast at odds with fears of oversupply

* Asia expected to power LNG demand

* Almost $200 billion in LNG projects in Australia
pipeline
(Adds detail on coal, uranium, wheat, background on LNG)

By Bruce Hextall

SYDNEY, March 2 (Reuters) - Australia on Tuesday forecast a
dramatic surge in gas exports over the next six years, powered
by strong Asian demand, in a bullish prediction that runs
counter to fears that the global market is heading into
oversupply.

The country's official commodities forecaster predicted
that exports of liquefied natural gas would nearly double by
2014/15, with demand from China, India and other energy-hungry
economies being fed by up to $200 billion in new Australian LNG
projects.

The Australian Bureau of Agricultural and Resource
Economics (ABARE), in its quarterly outlook, also gave upbeat
long-range forecasts for iron ore, the country's second-largest
export earner, with a forecast 68 percent jump in exports by
2014/15.

"The current situation is there seems to be ample supply on
LNG markets but longer term demand looks very positive," Jammie
Penm, ABARE's chief commodity analyst, told Reuters.

"China has an enormous appetite for LNG tonnes and also LNG
seems to be the growing feedstock for energy generation."

See table on potential new Asia LNG importers:
[ID:nSGE6200H1]

Australia has about A$215 billion ($193 billion) worth of
LNG projects in the pipeline, including A$65 billion already
approved, though there have been concerns that some of these
projects may never get build because of a global oversupply.

ABARE predicted LNG exports to race to 28 million tonnes a
year by 2014/15 from 15 million tonnes in 2008/09, and iron ore
exports to reach 546 million tonnes from 324 million as new
investment by mining giants BHP Billiton (BHP.AX) and Rio Tinto
(RIO.AX)(RIO.L) and an army of prospectors reach peak levels.

The International Energy Agency said in November the global
gas market was likely to remain oversupplied until 2015, with
demand from the recession-hit U.S. market remaining weak.

But Australia, which could replace Qatar as the world's
largest LNG producer by the end of the next decade, remains
very bullish on its booming gas export industry, with even the
central bank predicting a commodities bull run of 20 years or
more.

AUSTRALIA BETTING ON GAS, IRON ORE

As many as six LNG projects are rushing to be approved by
2010, including an ExxonMobil (XOM.N)-operated project in
neighbouring Papua New Guinea, Woodside Petroleum (WPL.AX) and
Inpex's (1605.T) Ichthys project in northern Australia.

The new projects also include three coal-seam gas
developments on the east coast proposed by Santos (STO.AX), BG
Group (BG.L), Origin Energy (ORG.AX) and ConocoPhillips
(COP.N).

Australia has the world's 14 largest known reserves of gas,
with about 200 trillion cubic feet.

ABARE also forecast 47 percent and 30 percent growth in
thermal coal and uranium exports over the next six years, again
reflecting strong Asian demand, but it made no major revisions
to its near-term forecasts for the year to June 30, 2010.

In terms of the immediate horizon, ABARE cautioned that
growth in OECD countries remained sluggish and any monetary
tightening by China could also limit growth.

In terms of farm production, ABARE predicted that the
world's fourth largest wheat exporter would raise output by
just over 1 percent in 2010/11 and could lift exports by 4
percent, despite weak grains prices, as drought conditions
ease.

It wheat output for 2010/11 would rise to 21.94 million
tonnes from a downwardly revised 21.66 million tonnes in
2009/10.

"Prices have been falling because of large harvests around
the world and large stocks," ABARE's Penm said.

For tables of ABARE forecasts for key commodities click on:

Metals [ID:nSGE62007O]

Wheat [ID:nSGE6200GO]

Sugar [ID:nSGE62008G]

Cotton [ID:nSGE6200GM]
($1=1.112 Australian Dollar)

(Additional reporting by Fayen Wong and James Regan,
Editing by Mark Bendeich)