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