Eni SPA has started gas production from Guendalina gas field in the Adriatic off northeastern Italy.

Guendalina, on the AC 35 AG concession in 42 m of water 47 km offshore, is producing 20 MMcfd from 22 bcf of proved and probable reserves.

Eni is operator with 80% interest, and Mediterranean Oil & Gas PLC has 20%. ENI notified MOG that the anticipated final project cost is likely to be 7% higher than original estimates.

MOG is selling its gas to the Italian utility Elettrogas SPA under a 1-year contract at an average annual gas price of $11.50/Mcf through Oct. 1, 2012. The contract automatically renews unless terminated by either party.