UPDATE 1-Norway's gas outage bigger than expected: Statoil

OSLO Feb 10 (Reuters) - Norwegian gas output will be reduced more than expected on Sunday, energy firm Statoil said, after a fire at a gas processing plant cut production a day earlier.

Norwegian production will be down by 22.5 million cubic metres, about 7 percent of the country's exports on a normal day, more than the 14.3 million cubic metres forecast earlier, the firm said in a market message.

Output fell by 25 million cubic metres per day on Saturday after production was partially shut at the Kaarstoe gas plant on Norway's western coast because of an early morning fire.

The plant was expected to start back up on Sunday, gas system operator Gassco said earlier.

Norway supplies about 20 percent of Europe's gas needs and state-controlled Statoil is the nation's biggest producer.

Gas production soared in 2012 as Norway managed to take market share away from Russia, and firms have been running their production at capacity.