Husky Energy sanctions development of Liwan gas project

Husky Energy Inc. has sanctioned the development of the Liwan 3-1 and Liuhua 34-2 fields, the principal fields of the Liwan gas project in the South China Sea. Husky and China National Offshore Oil Corporation (CNOOC) are jointly developing the project, which aims to bring to market at least three natural gas discoveries on Block 29/26, located approximately 300 km southeast of Hong Kong. The Overall Development Plan (ODP) for Liwan 3-1 has been submitted to Chinese government authorities for regulatory approval and a gas sales agreement for production from the field is in place.

"The Liwan Gas Project will serve as a cornerstone in our plans to establish South East Asia as a major growth pillar for the company," said Husky CEO Asim Ghosh.

"In addition to the sanction of the Sunrise Energy Project, Liwan represents the second major action we have taken over the past year to lay the foundations for our three growth pillars in the Oil Sands, South East Asia and the Atlantic Region."

A gas sales agreement has been executed with CNOOC Gas & Power Group, Guangdong Branch for volumes from the Liwan 3-1 field. Production will supply the Guangdong Province natural gas grid.

The project is proceeding on schedule towards planned first gas delivery in 2013/2014. Production from the Liwan 3-1 and Liuhua 34-2 fields is expected to ramp up through 2014 towards a rate above 300 million ft³/d. Once the Liuhua 29-1 field is approved and developed, the project is expected to reach gross production of approximately 500 million ft³/d in the 2015 timeframe. Husky has a 49% ownership interest in production from the block.

Husky has a rich portfolio of assets in South East Asia; assets include the producing Wenchang oil fields in the Pearl River Mouth Basin offshore China and natural gas discoveries offshore Indonesia.  The Company is targeting overall production from the region of approximately 50,000 barrels of oil equivalent per day in 2015.

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