TOKYO, July 3 (Reuters) - A fire caused Japan's biggest power generator JERA to shut down a 500 megawatt (MW) unit at its Chiba thermal power station near Tokyo on Saturday, raising fears of an electricity crunch as a prolonged heatwave keeps demand at high levels.

The fire broke out around noon on Saturday near the steam valve of one of the three turbines at the No.3 unit of the gas-fired combined-cycle power station, JERA said on Saturday. The fire was extinguished about an hour later, it added.

JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, was checking all equipment at the unit which had the fire and would announce the timing of the restart when it is set, JERA said in a statement.

Japan's industry ministry has said energy supplies are expected to remain tight during the peak summer season, asking households and businesses to conserve electricity.

Authorities had issued a daily warning for a possible power shortages from Monday through Thursday last week as the country suffered its worst June heat since record-keeping began 147 years ago.

Any further unexpected disruptions in power generation may prompt similar warnings again.

On Sunday, central Tokyo hit its ninth straight day of temperatures above 35 degrees Celsius (95 degrees Fahrenheit), marking the longest streak since record-keeping began in 1875, according to Kyodo news agency. (Reporting by Yuka Obayashi; Editing by Lincoln Feast)