SANTOS has lifted production and delivered higher sales revenue for the second quarter, underpinned by the successful start-up of the PNG LNG project in April.

For the three months to the end of June the company produced 12.8 million barrels of oil equivalent, up 5 per cent on the previous quarter and 3% higher year-on-year.

Sales revenue lifted accordingly, with Santos reporting a 22% jump in revenue to $974 million for the quarter and $1.887 billion for the first-half of 2014, representing a 25% jump compared to 2013.

Santos attributed the higher second quarter production and significant jump in sales revenue to the PNG LNG project beginning production during the quarter, revealing the ExxonMobil-operated development had shipped seven LNG cargoes by the end of the quarter.

Santos managing director and chief executive David Knox said the strong results would build momentum for an even better second half.

“Delivery of the PNG LNG project is an important milestone for Santos in our journey to becoming a major LNG supplier to Asia,” he said.

“This project will significantly lift Santos’ LNG production once the project reaches full output, and we are already seeing the contribution it is making.”

Overall gross gas production for the quarter from PNG LNG was 50 petajoules, with Santos’ share of gas production from its 13.5% stake in the project equating to 6.7PJ.

Closer to home, sales gas production from its GLNG project in Queensland was lower at 1.9PJ due to lower domestic gas nominations.

Nevertheless, Santos made significant headway on the project with a number of key construction milestones achieved across the project, including the handover for commissioning of the first upstream gas hub, completion of the final weld on the gas transmission pipeline and placement of the final train 1 module.

“GLNG continues to make good progress, it remains on budget and we are on track to deliver first LNG in 2015,” Mr Knox said.

Breaking the production result down, sales gas, ethane and gas to LNG production tipped in at 55.7PJ for the quarter, an 8% jump on the previous corresponding quarter. Santos said higher production from Darwin LNG and the start-up at PNG LNG was slightly offset by lower production from the Carnarvon basin due to lower customer nominations.

Quarterly crude oil production of 2.1 million barrels was 16% lower than the previous quarter due to outages at Fletcher Finucane and Chim Sáo, partially offset by higher Cooper basin production. The average oil price for the quarter was A$122 per barrel, 5% lower than the corresponding quarter.

Santos has maintained its full year guidance for production of between 51 million and 57 million barrels of oil equivalent.

The company will release its half-year results for 2014 on 22 August.