Origin Energy lifted production in the March quarter but the result has been marred by a cost blowout in its Bass Strait project.

Origin said the improved production numbers were due to higher volumes from the Australia-Pacific liquefied natural gas (APLNG) project in Queensland, in which it has a stake.

The $US20 billion project, a joint venture with US energy giant ConocoPhillips and Sinopec, is one of three giant coal seam gas (CSG) projects near Gladstone.

Origin’s gas production rose by eight per cent in the March quarter and sales revenue increased slightly due to higher commodity prices.

The energy producer and retailer said on Monday it produced 30.9 petajoules (PJe) of gas in the three months to March 31, up from 29.1 PJe in the same period in the previous year.

Sales volume in the March quarter of 33.2 PJe was flat on the previous corresponding period, but revenue was up two per cent to $203 million due to higher prices, Origin said.

However the increased production from APLNG and the Otway Gas Plant was offset by reduced production due to the shutdown of BassGas for works.

The Yolla Mid-Life Enhancement project works at BassGas have suffered a cost blow-out from $360 million to $460 million and time delays in completing the project in the middle of Bass Strait.

The joint venture, in which Origin owns 42.5 per cent, hopes to restart production from Yolla in July, with project commissioning and completion during the September quarter.

Origin Energy has flagged further sales of its equity in the APLNG to help pay for its expansion.

It currently has a 42.5 per cent stake, which will fall to 37.5 per cent.

However ConocoPhillips was reported last week as expressing caution about expanding beyond the current plans for a second train, amid falling gas prices in the US due to a glut of shale gas.

Origin shares increased by three cents to $13.26.