CNOOC - South China Sea Panyu 34-1

Project Status

Chinese offshore giant CNOOC Ltd. is to opt for either a platform-based development or sub sea completions for its Panyu 34-1 gas field in the Eastern South China Sea on 11th August 2005.

The field is located about 250 kilometers south-east of Hong Kong.

The operator has never before embarked on an all-sub sea development, having historically focused on large platforms and floating production, storage and offloading vessels.

CNOOC dabbled with the idea of all-sub sea development when Shell and Unocal were joint ventures in the Xihu Trough (Chunxiao) gas project. However, the two Western giants took their sub sea expertise with them when they withdrew from the Xihu venture.

Chinese operator was evaluating the feasibility of an all-sub sea development for PY 34-1 before submitting an oilfield development plan to the authorities and heading to the market with tenders for construction and installation August 2005.

If CNOOC opts for a platform, the construction contract will almost certainly go to sister company China Offshore Oil Engineering Company (COOEC), which is building the 25,000-tonne platform for the larger sister field of PY 34-1.

The yard will cost 1.7 billion Yuan ($205 million) to build and is due to be completed in 2009, with partial operations starting in 2006.

A 365-kilometre gas pipeline system will connect the Panyu fields and the Huizhou (HZ) 21-1 gas field with fast-growing markets in Guangdong province along the south-east coast.

Kvaerner E&C Singapore, part of the Aker Kvaerner group, is carrying out basic and detailed design engineering for the pipeline project, as well as the onshore receiving facilities as of August 2005.

CNOOC sees more success with the Panyu (PY) 34-1-2 appraisal well in the Eastern South China Sea.

PY 34-1-2, about 250 kilometers southeast of Hong Kong, is an appraisal well drilled on PY 34-1 structure in Baiyun Sag. The well was drilled to a total depth of 3600 meters in 200 meters of water. PY 34-1-2 was tested to produce 18.42 million cubic feet of gas per day on 12 mm choke during drill stem test.

PY34-1 discovery is about 10 kilometers southwest of PY 30-1 gas discovery which was made late 2002.

The preliminary development plan of PY30-1 and PY 34-1 calls for an integrated design to add productions from smaller reserves in the area to capture further economics. The gas is targeting the fast growing Guangdong gas market.  

As of March 2010, CNOOC has decided to tie a shallow-water development in with Husky’s huge Liwan deep-water gas find in the South China Sea.

The company is now involved in the overall development of the Panyu 34-1 gas field, which is close to Liwan’s platform in shallower waters. The plan is to build a new well-head platform for Panyu 34-1.

CNOOC’s engineering unit, China Offshore Oil Engineering Corporation (COOEC) will spearhead engineering, procurement and construction of the Panyu 34-1 platform, along with Husky’s Liwan platform.

Panyu 34-1 is 250 kilometres south-east of Hong Kong in a water depth of about 200 metres in the Baiyun trough in the eastern part of the South China Sea.

According to an agreement, CNOOC is the operator of the shallow water facilities’ engineering, procurement and construction, while Husky will take care of the deep-water part of it.

In a separate development, COOEC is set to build two extra platforms for the Panyu 42-51 oilfield in the South China Sea. (Topco)