Husky is focused on advancing the development of three major natural gas fields located in Block 29/26 in the South China Sea, approximately 300 kilometres southeast of Hong Kong.
Husky's first major discovery on the block, the deepwater Liwan 3-1 gas field, is considered a cornerstone development to future growth opportunities in the region. Its sister discoveries on the same block, the Liuhua 34-2 and Liuhua 29-1 fields, will share infrastructure for greater production and cost efficiency.
Husky has partnered with China National Offshore Oil Corporation (CNOOC) to jointly develop these fields.
Located about 300 kilometres southeast of Hong Kong, the Liwan 3-1 natural gas project is an important component of Husky's mid-term production growth strategy and a key step in accessing the burgeoning energy markets in Hong Kong and Mainland China.
First gas production is anticipated in late 2013, ramping up through 2014.
Husky and CNOOC have signed an agreement specifying the key principles of cooperation for funding and operation of Liwan 3-1. Husky will operate the deepwater portion of the Liwan 3-1 field, including development drilling and completions, subsea equipment and controls, and subsea tie-backs to a shallow water platform. CNOOC will operate the shallow water infrastructure, including the platform, subsea pipeline to shore and the onshore gas processing plant.
Husky's working interest in production is 49 percent. The Government of China has approved the Original-Gas-in-Place (OGIP) report for the Liwan 3-1 field.
The field will use a subsea production system connected by flow lines and manifolds to a central shallow water platform, which in turn will be connected by pipeline to an onshore gas plant.
The Liuhua 34-2 field is being developed in parallel with the Liwan 3-1 field and is scheduled be tied into the Liwan infrastructure during an estimated eight-week period in the second half of 2014.
All of the initial planned production from Liwan 3-1 and Liuhua 34-2 are covered by fixed-price sales agreements. Negotiations for the Liuhua 29-1 field gas are in progress.