Australia's Gladstone LNG ships maiden cargo

MELBOURNE, Oct 16 (Reuters) - The first cargo from the $18.5 billion Gladstone liquefied natural gas project left on Friday, the second of seven new Australian LNG projects putting the country on track to overtake Qatar as the world's top LNG exporter in the next three years.

The launch was a rare piece of good news for Santos Ltd , the operator of the project, which is racing to sell assets to cut its $8.8 billion in net debt to help it ride out what is expected to be a prolonged period of weak oil prices.

The maiden cargo from the world's second LNG plant fed by coal seam gas is headed to Korea Gas Corp (KOGAS) in South Korea, one of the partners in GLNG.

Most of the 7.8 million tonnes a year production is locked into 20-year oil-linked contracts with KOGAS and Malaysia's Petronas, another partner in the project, giving the owners confidence in the long term returns.

"GLNG is a robust project and will generate strong cash flows for the business for decades to come," Santos Chief Executive David Knox, whom the company is looking to replace, said in a statement.

However, the expected profits have been crushed as oil prices have halved since the project was approved in January 2011. That combined with worries about Santos' debt load knocked its shares to a 15-year low last month.

Santos has a 30 percent stake in GLNG, with Petronas and France's Total each owning 27.5 percent and KOGAS owning 15 percent. ($1 = 1.3646 Australian dollars) (Reporting by Sonali Paul; Editing by Bernard Orr)