* First stage at 25,000 metric tons in 2027

* Lake targets 50,000 metric tons a year by 2030

* Cost blows out to $1.1 billion-$1.5 billion

June 19 (Reuters) - Australian lithium developer Lake Resources on Monday announced a three-year delay to first production from its Kachi project in Argentina and more than doubled its cost estimate, which sent the company's shares tumbling 23%.

The delay comes just as demand for lithium chemicals is expected to drive the industry's sales to more than $10 billion a year within the next decade, given rapidly expanding production of batteries for electric vehicles.

Lake's initial plan had been for first production in 2024 at a capital expenditure cost of $544 million, as outlined in 2020 report.

But in an investor update on Monday following a revamp of the project, the developer pushed back expected first production of 25,000 metric tons of lithium carbonate to 2027 and hiked spending estimates to $1.1 billion to $1.5 billion.

The plans include a phased expansion to 50,000 metric tons a year by 2030, Lake CEO David Dickson said.

Dickson, who became CEO last September bringing a background of 30 years in oil and gas project development, told Reuters that Lake Resources had significantly de-risked the project, grown its lithium resources and now had a realistic timeline.

"This is not a mining project. We are building a specialty chemical process plant," he told Reuters.

Shares in Lake were down 15% at A$0.4025 at midday after hitting a low of A$0.385.

Soaring inflation, supply chain lags and a lack of skilled labour have forced a swathe of blow outs for lithium developers.

The delay at Kachi is partly because it has yet to finalise a power supply deal with the local government. It is too early to say what percentage of grid power would be sourced from fossil fuels and renewable energy, Dickson said.

The Kachi project is a test bed for direct lithium extraction, a new technical process that uses much less water but has yet to be fully commercialised.

Lake is targeting 70% funding from export credit agencies and a contribution from its technology provider, Bill Gates-backed Lilac Solutions. It will also consider offering equity and obtaining financing from its customers, Dickson told an investor briefing.

Its customers are South Korea's SK Innovation battery unit SK On and battery materials trading house WMC Energy, which owns a 10% stake in the developer.

Lake said it had delayed completing a key study that is often a catalyst for investment to December from mid-year.

($1 = $1.0000) (Reporting by Harish Sridharan in Bengaluru; Editing by Kim Coghill and Sonali Paul)