Husky, CNOOC start gas production at Liuhua 34-2 field

Husky Energy Inc. and China National Offshore Oil Corp. Ltd. reported the start of natural gas production at the Liuhua 34-2 gas field in the South China Sea.

The field is producing 30 MMcfd from one well, CNOOC said. Peak production of 45 MMcfd is expected in 2015.

It’s the second field to be brought online at the Liwan gas project this year. Liwan 3-1 field started production in March (OGJ Online, Mar. 31, 2014).

The Liwan gas project is about 300 km southeast of Hong Kong. Liwan 3-1, Liuhua 34-2, and Liuhua 29-1 fields share a subsea production system, subsea pipeline transportation, and onshore gas processing infrastructure.

“Liuhua 34-2 will contribute to the ramp up of Liwan next year,” said Husky Chief Executive Officer Asim Ghosh. “The project is making a sound contribution to our business and is now delivering significant cash flow from gas sales that are at a higher price than in North America.”

Gas from Liwan 3-1 and Liuhua 34-2 is being processed at an onshore gas terminal at Gaolan and sold to mainland China, with initial production covered by fixed-price gas sales agreements, Husky said.

Husky holds a 49% interest in the Liwan gas project and operates the deepwater system. CNOOC holds 51% and operates the shallow-water facilities and the gas terminal.

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