Third Liwan gas development on track for 2021 start-up

Husky Energy is working towards sanction of the Liuhua 29-1 development, the third deepwater gas field serving the Liwan gas project in the South China Sea, after concluding a gas sales agreement.

Construction should start next year followed by first gas in 2021. Production will be tied into the existing Liwan subsea infrastructure and the onshore Gaolan gas plant, and delivered to buyers in the Pearl River Mouth basin area.

Husky expects to recover around US$250 million in exploration costs within the first 18 months of production. Under the production-sharing contract (PSC), CNOOC can back into any field development projects offshore China for up to a 51% working interest.

The PSC for the Wenchang oil field in the Pearl River Mouth basin is due to expire in mid-November, after which Husky will lose its 40% interest, which netted the company 6,000 b/d on average during the third quarter.

First lifting of liquids took place last month from the recently on-stream BD gas project in the Madura Strait offshore Indonesia. The facilities continue to ramp up toward the full gas sales rates, Husky adds, with a sales production target of 100 MMcf/d and 6,000 b/d of associated liquids.

The partners are advancing work scheduled for other projects in the Madura Strait, with seven production wells due to be drilled on the MDA-MBH fields in the first half of 2018, ahead of first gas anticipated in 2019. A field at MDK will also be tied in, with all three fields sharing infrastructure.

Construction of a floating production vessel progresses, with the processed gas to be transported through the East Java subsea pipeline.