CNOOC starts gas output at Liuhua 29-1

Offshore oil and gas major China National Offshore Oil Corp said on Monday that it has started gas production from its deep-water Liuhua 29-1 field in the South China Sea.

The Liuhua 29-1 gas field is located in the eastern South China Sea, 86 kilometers northeast of CNOOC's Liwan 3-1 gas field at an average water depth of about 640 to 785 meters. The gas field is expected to produce 1.7 million cubic meters of gas every day and achieve a peak production of around 62 million cubic feet per day by 2022.

CNOOC, which has teamed up with Canada-based Husky Energy for the Liuhua gas field, said it would step up its cooperation with other foreign companies for offshore gas production so as to ensure stable domestic supplies.

The Chinese oil major has a 25 percent working interest in the Liuhua 29-1 project and acts as the shallow-water operator, while Husky, which is in the midst of being taken over by compatriot Cenovus Energy, holds the majority 75 percent stake and acts as the operator in the deep water.

Li Ziyue, an analyst with BloombergNEF, said CNOOC has been stepping up its efforts to ramp up domestic gas output in recent years in line with the government's efforts to ensure domestic energy consumption. The Liuhua 29-1 will help provide for CNOOC's 22.9Bcm of gas supply for the ensuing heating season, she said.

According to CNOOC, after the gas field is put into operation, the newly added gas production will be able to cater to 10 million households every year, further securing the domestic energy security and the green development of the Guangdong-Hong Kong-Macao Greater Bay Area.

A new subsea wellhead has been built, with seven development wells planned in total. The gas field will fully utilize the existing production facilities of Liuhua 34-2 gas field and Liwan 3-1 gas field, it said.

According to Wang Yijiang, deputy director of the Liuhua 29-1 project, the development of the project has not only pushed forward the localization of engineering resources, but also lifted domestic capacity of deep water oil and gas exploitation and production.

CNOOC and Husky had earlier teamed up for the Liwan 3-1 gas field, which was put into operation in 2014, marking the first step in the development of deep water gas in the South China Sea. Together with Liuhua 32-2 and Liuhua 29-1, this is the country's first deep water gas field cluster in the South China Sea.

Wang Dongjin, chairman of CNOOC Ltd, said the company will further expand its opening-up efforts and look for more cooperation to achieve sustainable development.

The company has signed more than 200 contracts with 81 global oil companies in recent years, and has attracted more than $30 billion of foreign capital. In the South China Sea alone, the company has cooperated with 58 global oil and gas companies from 16 countries and jointly produced more than 150 million metric tons of oil and gas, it said.