UPDATE 1-Inpex's Ichthys LNG produces first gas off Australia

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MELBOURNE, July 30 (Reuters) - Inpex Corp said on Monday it has begun producing gas at its giant Ichthys field off northern Australia, putting it a big step closer toward shipping its first liquefied natural gas (LNG) cargo from the long-delayed $40 billion project.

Start-up of gas production is a major milestone for the project, Japan’s biggest overseas investment and first major energy development to be operated by the country’s top oil and gas producer.

Inpex said it now expects to start exporting products by the end of September, with condensate to be shipped first, then LNG and liquefied petroleum gas (LPG), nearly two years later than its initial target.

“The project expects to begin the shipment of products towards the end of the first half of the current fiscal year,” Inpex said in a statement. The first half ends in September.

The project is expected to take two or three years to reach its full capacity of 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of LPG and around 100,000 barrels per day of condensate, an ultra-light form of crude oil.

Inpex said it was reviewing expected revenue contributions from the Ichthys project for the year to March 2019, taking into account the oil price outlook and other factors, and would inform the market if its forecasts are revised.

Inpex owns just over 62 percent of Ichthys LNG, with France’s Total SA holding 30 percent. The remainder is owned by Taiwan’s CPC Corp and Japanese utilities.

Reporting by Sonali Paul; editing by Richard Pullin