Husky Energy (TSX:HSE) announced commissioning is complete at the third field at the Liwan Gas Project offshore China.

As a result of strong cooperation between Husky and its long-time partner CNOOC, the seven-well Liuhua 29-1 project was completed safely, ahead of schedule and $100 million below budget despite the COVID-19 pandemic and associated global economic volatility. First gas is expected to be delivered to end users starting in early November.

“The startup of Liuhua 29-1 just two years after the project was sanctioned is a significant milestone for Husky and CNOOC,” said CEO Rob Peabody. “This third field will provide Husky with additional stability in funds from operations.”

The 29-1 field is tied into the existing infrastructure at Liwan, which includes the Liwan 3-1 and Liuhua 34-2 fields within Block 29/26, approximately 300 kilometres southeast of the Hong Kong Special Administrative Region.

In total, the Liwan Gas Project is expected to deliver around $950 million in funds from operations in 2021, Husky working interest. The Liuhua 29-1 field alone is expected to generate $1.3 billion in funds from operations for Husky over the next decade.

The new production will also provide a clean-burning source of energy to the growing market in southern China, and moves Husky closer to its 25% greenhouse gas intensity reduction target.

Year to date in 2020, total production from the two producing fields at Liwan is approximately 390 million cubic feet per day (mmcf/day) of natural gas and 16,000 barrels per day (bbls/day) of associated liquids. Total production in 2021 is expected to be 450 mmcf/day and 17,500 bbls/day of liquids.

Husky has a productive and longstanding relationship with its partner CNOOC in the Asia Pacific region, with a considerable track record for executing large projects on time and within budget starting with the successful Wenchang offshore oil project in the South China Sea, which began production in 2002.

About Husky

Husky (TSX:HSE) is an integrated energy company headquartered in Calgary, Alberta. It has approximately 5,200 employees and has average daily production of about 320,000 barrels of oil equivalent per day.

The Company has two main areas of focus:

- The Integrated Corridor includes natural gas, non-thermal oil, NGLs and thermal production from Western Canada, the Lloydminster upgrading and asphalt refining complex, the Husky Midstream Limited Partnership (35 percent working interest and operatorship), and the Lima and Toledo refineries in the U.S. Midwest. Gas production from the repositioned Western Canada portfolio is closely aligned with the Company’s energy requirements for refining and thermal bitumen production, and acts as a natural hedge.

- The Offshore business includes operations and exploration in the Asia Pacific region, primarily offshore China, Indonesia and Taiwan, and in the Atlantic, offshore Newfoundland and Labrador. Each area generates high-netback production, with near and long-term investment potential.

About CNOOC

China National Offshore Oil Corporation (SEHK: 00883, NYSE: CEO, TSX: CNU), the largest offshore oil and gas producer in China, is a mega government owned company operating directly under the State-owned Assets Supervision and Administration Commission of the State Council of the People's Republic of China.