OSLO (Reuters) - The big Ormen Lange field offshore Norway began producing gas on Thursday, field developer Norsk Hydro said.

Ormen Lange, which took $11 billion and 10 years to develop, will supply Britain with up to a fifth of its gas needs through the world's longest undersea pipeline running across the North Sea from Norway's west coast to Easington in Britain.

When Ormen Lange reaches plateau production in 2010, gas exports from Norway will rise to 120 billion cubic meters, covering 20 percent of Europe's needs and making the Nordic country the world's second-biggest gas exporter after Russia.

"This is a historic milestone, not only for Hydro, but also for the license partners and the Norwegian industry as a whole," said Tom Roetjer, Hydro's director for Ormen Lange.

"We are thrilled to be able to deliver gas from the Ormen Lange field to the UK and continental market, as planned."

Hydro has said Ormen Lange aims to start with output of 30 million cubic meters of gas per day, rising to 50 mcm in the second year of production and 70 mcm in the third.

"From now until the inaugural ceremony on October 6, we will be testing production. This may result in fluctuating volumes of gas flowing from the field," Roetjer said.

Shell, which has a 17.04 percent interest in the field, will take over as Ormen Lange production phase operator. Danish DONG has 10.34 percent, U.S. major Exxon 7.23 percent, Norway's state-owned Petoro 36.48 percent and Hydro and its merger partner Statoil a combined 28.91 percent.

Ormen Lange becomes the second-biggest gas field offshore Norway after Statoil-operated Troll, with recoverable reserves of 397 billion standard cubic meters of gas. The project, delivered on time and budget, includes remotely controlled wells on the Norwegian Sea floor, an onshore gas processing plant at Nyhamna on Norway's west coast and the 1,200 km Langeled pipeline.