A first appraisal of Calgary-based Husky Energy Inc’s Liwan 3-1 field in the South China Sea has revealed “a major offshore gas discovery”, the company has reported.

Company boss John Lau said the Block 29/26 well — spud in November 2008 — provided key data for a front-end engineering and design stage to “commence soon”.

The 2006 discovery in the the Pearl River Mouth Basin was made in water 1,345 metres deep, some 350 kilometres southeast of Hong Kong. The Liwan appraisal well reached total vertical depth of 3,887 m below sea level.

The well flowed at an equipment restricted rate of 53 million cubic feet per day good for over 150 million cubic feet per day under production, “further evidence of Liwan 3-1 as a major gas discovery”.

The Liwan 3-1-2 appraisal was drilled fter 3-D seismic data interpretation in a large structure showing 55 square kilometres of mapped closure, Lau said. The well was logged and encountered 36 m of net gas pay. Analysis then showed oil and gas over most of the 55 sq. km.

Husky has chartered the West Hercules deepwater rig for three years plus extension options. “A second appraisal well is planned at Liwan, where FEED work for the Liwan Development Project is being prepared for tender and is expected to begin once results are obtained from the next appraisal well,” said Lau.

CNOOC has the right to participate in the development for up to 51 per cent working interest.

Tags: Husky Energy Inc., Husky Oil China Ltd