Santos says natural gas production at its Peluang gas project in Indonesia has begun ahead of schedule and on budget.

Peluang, located offshore in East Java, is expected to hit a gross peak production of 25 million standard cubic feet per day.

“The success of first gas ahead of schedule and on budget with Peluang represents another significant milestone in the company’s delivery of a strong growth strategy in Asia,” Santos Vice President of Asia John Anderson said.

The project is located in the Madura offshore production sharing contract, in which Santos has a 67.5 per cent interest.

Its shares were down 16 cents at $13.25 at 1235 AEDT.