Wellington, June 12 NZPA - The first raw gas from the Kupe field, off the south Taranaki coast, is expected to be brought ashore in the fourth quarter of this calendar year.

New Zealand Oil & Gas chief executive David Salisbury said the company previously expected three calendar quarters of Kupe production in the 2009/10 financial year.

Although production rates during commissioning were difficult to predict, it was now likely that production during the December quarter would be reduced, he said today.

Production forecasts for later years were not affected.

It was expected Kupe would meet about 15 percent of New Zealand's current annual gas demand and half the country's LPG demand.

NZOG, which owns 15 percent of Kupe, said advice on the timing of the first raw gas came from project operator Origin Energy, which has a 50 percent stake.

Bringing ashore the raw gas would effectively signal the start of production.

Origin executive general manager, major development projects, Andrew Stock said construction of offshore wells, wellhead platform, pipeline and controls umbilical was complete.

The overall project including the production station near Hawera was nearing completion, with testing and pre-commissioning later than planned.

Capital costs for the Kupe project remained in line with previous expectations.

Some of the facilities were already active as part of pre-commissioning, while the balance of facilities would be progressively readied and commissioned in coming months.

Other participants in the project are Genesis Energy with 31 percent and Mitsui E&P Australia with 4 percent.