* Total, Shell hunt plant, terminal projects
* LNG output capacity could rise by 150 mln tonnes by 2020
* Surging capacity spurring hunt for new markets
* Oversupply allowing smaller buyers to tap LNG spot market
* Technology helping speed expansion
By Ron Bousso and Oleg Vukmanovic
LONDON, June 12 (Reuters) - Energy giants such as RoyalDutch Shell and Total are looking to buildterminals and power plants in new markets to soak up theindustry's rapidly burgeoning supply.
Companies have invested billions in plants to produceliquefied natural gas (LNG) in places such as Australia and theUnited States.
But gas demand growth is slowing, prices are down and theLNG volumes companies are set to produce will exceed those evenmajor buyers such as China and Japan can absorb.
That has turned attention to the downstream market andopportunities to create new markets from Ivory Coast to remoteIndonesian islands by building gas-fired power plants,pipelines, regasification and storage terminals.
"We are ready to go downstream as much as it takes to unlockgas demand," said Laurent Vivier, president for the gas divisionat Total.
"We need to be present in downstream ourselves, to createdemand and unlock bottlenecks along the chain includingregasification, pipelines and power plants."
Total aims to triple the number of its gas and power marketsand raise its annual LNG output to 20 million tonnes and itstrading to 15 million tonnes by 2020.
The company is taking part in LNG infrastructure tenders,including several gas-fired power plants, in countries includingIndonesia, Chile, Ivory Coast, Ghana and Morocco, Vivier said.
Shell believes the number of markets buying LNG coulddouble, according to its chief financial officer, Simon Henry.
"From around 20 to 30 ...we can see potential for around 50different markets if you look out to 2030," Henry said. "Our aimis to capture the best share of those who are looking now tostart or grow."
The focus on downstream mimics a model that companies suchas Shell, Total, Exxon Mobil and Chevron haveused for decades in the oil sector where their operations spanoil wells, refineries and service stations.
But some analysts question how easily that model can bereproduced.
"Whether they succeed in this is another story, whether theyhave the mindset for this type of work is also another story,"said Thierry Bros, senior gas analyst at French bank SocieteGenerale.
"It will be a painful test for these companies who are notthat experienced in building small downstream demand," he said.
TECHNOLOGY
New technologies are helping speed development, withfloating terminals, for example, offering a cheaper alternativeto onshore units that cost more than $1 billion.
"We are looking at multiple markets around the world interms of potential to regas," said Shell's Henry. "Quite a lotof it is floating regasification because it is quick and you candevelop (a market) in stages."
Shell, the world's top LNG trader after buying BG Group,expects to produce around 30 million tonnes of LNG this year andtrade nearly 50 million tonnes, accounting for about a sixth ofglobal trading volume.
Global output capacity is expected to rise by half by 2020,potentially adding some 150 million tonnes of LNG to the market.
However, overall gas demand growth is expected to slow to1.5 percent a year to 2021 from the 2.5 percent rate seenrecently, the International Energy Agency has forecast.
In step with oil and gas, LNG prices have also struggled inthe last two years. That has prompted traders to offer moresingle cargoes for immediate delivery on the spot market, makingit easier for smaller buyers to find supply.
(Editing by Jason Neely)
