Photo: Liwan platform; Source: Husky Energy

Husky completes commissioning at Chinese offshore project with first gas slated for November

Canadian energy player Husky Energy has completed the commissioning at the third field at the Liwan Gas Project located offshore China.

As reported earlier in September, Husky was nearing the startup of the Liuhua 29-1 field at the Liwan Gas Project with tie-in of the Liuhua 29-1 field complete.

In an update on Wednesday, Husky said that, together with its long-time partner CNOOC, it had completed the seven-well Liuhua 29-1 project ahead of schedule and $100 million below budget despite the COVID-19 pandemic and associated global economic volatility.

According to Husky, the first gas is expected to be delivered to end-users starting in early November.

“The startup of Liuhua 29-1 just two years after the project was sanctioned is a significant milestone for Husky and CNOOC”, said CEO Rob Peabody.

“This third field will provide Husky with additional stability in funds from operations”.

The 29-1 field is tied into the existing infrastructure at Liwan, which includes the Liwan 3-1 and Liuhua 34-2 fields within Block 29/26, approximately 300 kilometres southeast of the Hong Kong Special Administrative Region.

The $6.5 billion Liwan project comprises three natural gas fields that include the already producing Liwan 3-1 and Liuhua 34-2 fields, and the Liuhua 29-1 field development.

In total, the Liwan Gas Project is expected to deliver around $950 million in funds from operations in 2021, Husky working interest. The Liuhua 29-1 field alone is expected to generate $1.3 billion in funds from operations for Husky over the next decade.

The new production will also provide a clean-burning source of energy to the growing market in southern China, and moves Husky closer to its 25 per cent greenhouse gas intensity reduction target.

Year to date in 2020, total production from the two producing fields at Liwan is approximately 390 million cubic feet per day (mmcf/day) of natural gas and 16,000 barrels per day (bbls/day) of associated liquids.

Total production in 2021 is expected to be 450 mmcf/day and 17,500 bbls/day of liquids.