Husky Oil China Ltd., a wholly owned subsidiary of Canada-listed Husky Energy Inc., said it made a significant natural gas discovery in the South China Sea.

Liwan 3-1-1, which was drilled in a water depth of 1,500 meters on Block 29/26 in the Pearl River Mouth Basin, is estimated to contain a potential recoverable resource of four to six trillion cubic feet of natural gas.

It would be one of the largest natural gas discoveries offshore China, according to the company's website.

Liwan 3-1-1, which is the deepest water well drilled offshore China, confirms the existence of a new hydrocarbon province, the website report said.

The block is located approximately 250 kilometers south of Hong Kong.

Husky has been actively exploring offshore China, in collaboration with CNOOC (China National Offshore Oil Corporation) since 2002.

Husky signed the Production Sharing Agreement for Block 29/26 in August 2004, with a commencement date of October 2004.

Block 29/26 is 3,965 square kilometers in area and one of the three exploration blocks currently held by Husky in the South China Sea.

CNOOC has the right to participate in the development of any discovery for up to 51 percent working interest.

Source: Xinhua