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CNOOC To Begin Deepwater Gas Production In South China Sea In 2021

China National Offshore Oil Corporation (CNOOC) targets its deepwater natural gas project Lingshui 17-2 in the South China Sea to begin producing natural gas at the end of 2021, a company official told Reuters on Tuesday.

CNOOC and other major state-owned oil and gas firms in China have pledged to boost their natural gas production. As per government policy, China is looking to increase its natural gas production, especially shale gas output, to reduce its import dependence while demand continues to grow in the foreseeable future.

Lingshui 17-2 in the South China Sea, 150 kilometers (93 miles) southwest from the Hainan province’s coast, is a key deepwater gas field 100-percent operated by CNOOC. It is seen as a test of how the Chinese offshore explorer and producer would fare in operating a deepwater gas field alone, without the support of partners like Total or Exxon with which CNOOC holds stakes in offshore projects outside China.  

The Lingshui field was discovered in 2014—the first discovery CNOOC had made as an operator, with its own semisubmersible rig and crew, Wood Mackenzie said back then. In September 2014, the field was expected to revive interest from international oil majors in deepwater exploration offshore China, but then came the oil price crash that crippled investment available for risky deepwater drilling and companies backed off uncertain high-cost ventures.

Now CNOOC expects first gas production at Lingshui 17-2 at the end of 2021, while WoodMac’s Research Director for Asia Pacific Upstream, Angus Rodger, sees first gas in 2022, considering that it will be a new deepwater project with little existing infrastructure in place.  

Aker Solutions won in October last year an order from CNOOC to provide the subsea production system and umbilicals for the Lingshui 17-2 gas field. The delivery for the system and umbilicals will take place between the second half of this year and the end of next year.

By Tsvetana Paraskova for Oilprice.com

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