Husky, CNOOC start production from Liwan 3-1

Husky Energy Inc., Calgary, and CNOOC Ltd. reported the start of production from Liwan 3-1 field in the South China Sea.

Husky said initial natural gas sales from Liwan 3-1 are expected at 250 MMcfd gross, increasing to 300 MMcfd in this year’s second half. Initial sales of condensate and natural gas liquids are expected at 10,000-14,000 boe/d gross.

Husky previously said it could recover 4-6 tcf of gas from Liwan (OGJ Online, Feb. 24, 2009).

Liwan 3-1 is part of the Liwan gas project, 300 km southeast of the Hong Kong Special Administrative Region, that also includes Liuhua 34-2 and Liuhua 29-1 fields. All three fields share a subsea production system, subsea pipeline transportation, and onshore gas processing infrastructure.

Liuhua 34-2 will be tied into the Liwan infrastructure in this year’s second half. Production from Liwan 3-1 field is scheduled to go offline for 6-8 weeks to provide for the tie-in of the field.

Following the tie-in of Liuhua 34-2, combined gas sales are anticipated to increase to 340 MMcfd gross, Husky said. Gas from both fields will be processed at the onshore gas terminal at Gaolan and sold to the mainland China market, with initial production covered by fixed-price sales agreements.

Total gas sales are expected to increase toward 400-500 MMcfd gross with the planned tie-in of Liuhua 29-1 field in 2016-17.

Husky said it now expects to achieve the lower end of its Asia Pacific production guidance of 35,000-45,000 boe/d.

Husky holds 49% interest in the Liwan gas project’s production-sharing contract and operates the deepwater infrastructure, while CNOOC, with 51%, operates the shallow-water facilities and onshore gas terminal.

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