Husky upbeat on gas potential in South China Sea

April 2, 2014

The deepwater regions of the northern South China Sea have big gas exploration potential and are only in an early stage of development, a senior manager of Husky Energy, which discovered the mainland's first major deep-sea natural gas field, said on April 1, South China Morning Post reported on April 2.

Robert Hinkel, Husky's chief operating officer for the Asia-Pacific, said only about 25 wells had been drilled in the northern South China Sea, with one major discovery already made, whereas 180 wells were drilled before the first commercial discovery in deepwater areas of the North Sea.

"It is very early days for a huge area," Hinkel said, adding that Husky and its partner, CNOOC, the mainland's dominant offshore oil and gas producer, had done well to have drilled 11 wells and made three discoveries, compared with an average 10 per cent success rate internationally.

Husky, the Canadian oil and gas unit majority owned by Li Ka-shing and conglomerate Hutchison Whampoa, said on April 1 its Liwan natural gas project, discovered about 300 kilometres southeast of Hong Kong in 2006, had just started commercial production.

The first of its three fields is expected to produce 2.58 billion cubic metres of gas a year initially, rising to 3.1 billion in the second half of this year when the second field starts up. A third field is projected to come on stream by 2016 or 2017, raising the total output capacity of the project to between 4.13 billion and 5.16 billion cubic metres.

The peak output of about 5.16 billion cubic metres is expected to last five years, after which production will decline gradually.

Copyright: South China Morning Post, 2014