OREANDA-NEWS. 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.

Husky Energy is one of Canada's largest integrated energy companies. It is headquartered in Calgary, Alberta, Canada and its common shares are publicly traded on the Toronto Stock Exchange under the symbol HSE.