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Husky starts work on second Liwan Field platform offshore China

25th July 2014

Husky Energy has announced the installation of a second deepwater production pipeline in the Liwan Gas Project in Block 29/26 in the South China Sea as part of its second quarter report

Husky starts work on second Liwan Field platform offshore China
The Liwan Project is Husky's largest development to date and the first deepwater gas project offshore China

“Construction vessels have commenced work to complete the installation of a second deepwater production pipeline from the main Liwan 3-1 field to the shallow water central platform,” said the report.

“The field is scheduled to be shut-in for six to eight weeks starting in the fourth quarter to facilitate the installation.”

Sales gas from the project are sold into the mainland China market, and the company recently began regular shipments of natural gas liquids and condensates.

In Indonesia, construction is progressing on the shallow water platform infrastructure for the BD field and the contract award for the FPSO (Floating Production, Storage and Offloading) vessel has received final regulatory approval. The tendering process for the MDA and MBH joint development is in progress, and a gas sales agreement is being negotiated.

"Our continued investment in longer-wavelength projects such as heavy oil thermals, resource plays and oil sands provide steady production and more predictable cash flow to support our growth projects in the Asia Pacific and the Atlantic Regions," said Asim Ghosh, Husky CEO.

"Our new thermal developments are delivering well above their nameplate designs and production was further boosted this quarter by strong performance from our resource plays and the start-up of the Liwan Gas Project."

The Liwan Project is Husky's largest development to date and the first deepwater gas project offshore China.

Located in the South China Sea approximately 300 kilometres southeast of the Hong Kong Special Administrative Region, the project delivered first production approximately seven years following its discovery. It is considered one of the fastest developments in the world for a large-scale gas discovery in deep water.

Liwan consists of three natural gas fields: Liwan 3-1, Liuhua 34-2 and Liuhua 29-1, which share a subsea production system, subsea pipeline transportation and onshore gas processing infrastructure.

 

Liwan 3-1

First gas was produced at the Liwan 3-1 field in March 2014. The field's nine deepwater wells are located in approximately 1,200 to 1,500 metres of water about 75 kilometres from a shallow water platform, which in turn is connected by pipeline to the onshore Gaolan Gas Terminal.

The terminal will extract condensates and liquids and compress and move the Liwan gas to commercial markets in mainland China.

Gas production is covered by a long-term sales contract, while condensates and natural gas liquids (NGLs) such as propane and butane will be sold separately.

Husky holds a 49 per cent interest in the Production Sharing Contract (PSC) and operates the deepwater segment of the infrastructure, including the nine subsea wells, deepwater flowlines, control systems and manifolds, and the Mono-Ethylene Glycol (MEG) unit on the shallow water platform.

The company's partner, CNOOC Limited, operates the shallow water facilities, including the platform, the 260-kilometre subsea pipeline to shore and the onshore gas terminal.

 

Liuhua 34-2

The Liuhua 34-2 field is being developed in parallel with the Liwan 3-1 field. Subject to final approvals, the field is scheduled to be tied into the Liwan infrastructure in the second half of 2014. Gas production is covered by a long-term sales contract.

 

Liuhua 29-1

Negotiations are underway for the gas sales contract for the Liuhua 29-1 field, with first production anticipated in the 2016-2017 timeframe.

 

Liwan Gas Sales

Initial natural gas sales from Liwan 3-1 are expected to be approximately 250 million cubic feet per day (mmcf/day gross). Following the planned tie in of Liuhua 34-2, combined gas sales are anticipated to increase to approximately 340 mmcf/day (gross) and rise to a range of 400 to 500 mmcf/day (gross) with the tie-in of the Liuhua 29-1 field.

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