Australian energy company Santos announced it is producing its first batch of liquefied natural gas from a facility on Curtis Island, Queensland.

Santos said LNG was produced from Train 1, the first of its liquefaction and purification facility at Curtis Island, on time and on budget.

"We said we'd produce first LNG around the end of the third quarter, and that's exactly what we've done," Santos Chief Executive Officer David Knox said in a statement. "Our upstream facilities are fully operational and performing well, we're producing LNG on Curtis Island, and we're now looking forward to safely delivering our first LNG cargo in the coming weeks."

Santos leads the $18.5 billion project designed to convert coal seam natural gas to LNG for exports to the global market. The Curtis Island LNG project is fed by a 260-mile underground pipeline from the Bowen and Surat basins in Queensland.

LNG processing at Train 1 precedes first cargo deliveries to the Asian market in the coming weeks.

Santos released net profit for the first half of 2015 at $37 million, 82 percent lower year-on-year. Capital expenditure was down by more than half from the same period in 2014, reflecting the substantial slump in crude oil prices.

The board of directors in August announced Knox will step down after seven years on the job. Chairman Peter Coates will serve as the interim director until a successor is named.