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Husky Energy and CNOOC Limited have started production at the Liuhua 34-2 gas field in the South China Sea, the second field to be brought online at the Liwan Gas Project this year.

The Liwan 3-1 field began production in March 2014.

“Liuhua 34-2 will contribute to the ramp up of Liwan next year,” said CEO Asim Ghosh. “The project is making a sound contribution to our business and is now delivering significant cash flow from gas sales that are at a higher price than in North America.”

The Liuhua 34-2 field will produce approximately 30 million cubic feet per day (mmcf/day, gross) in addition to the Liwan 3-1 volumes.

Located approximately 300 kilometres southeast of the Hong Kong Special Administrative Region, the Liwan Gas Project consists of the Liwan 3-1, Liuhua 34-2 and Liuhua 29-1 fields, which share a subsea production system, subsea pipeline transportation and onshore gas processing infrastructure. Natural gas from Liwan 3-1 and Liuhua 34-2 is being processed at the onshore gas terminal at Gaolan and sold to the mainland China market, with initial production covered by fixed-price gas sales agreements.

Husky holds a 49 percent interest in the Production Sharing Contract (PSC) for the Liwan Gas Project and operates the deepwater infrastructure. Its partner CNOOC Limited holds a 51 percent interest in the PSC and operates the shallow water facilities and onshore gas terminal.