2/12/2015

China Unveils Major South China Sea Gas Find | The Diplomat

China Unveils Major South China Sea Gas

Find
Large yields may further fuel resource extraction efforts in
contentious waters.
By Prashanth Parameswaran
February 11, 2015

China said Saturday that a recent gas discovery in the contentious

South China Sea could yield more than 100 billion cubic meters of
natural gas, highlighting Beijings continued efforts to extract resources
from waters in spite of lingering territorial disputes with neighboring
countries.

Image Credit: Wikimedia Commons

On February 7, Global Times reported that China National Offshore

Oil Corp (CNOOC) had disclosed that the Lingshui 17-2 gas field, discovered 150 kilometers south of Chinas southernmost
island of Hainan, had an annual output of up to four billion cubic meters.
Xie Yuhong, a manager with CNOOC, characterized that estimate as conservative.
The Lingshui 17-2 gas field made headlines when it was originally discovered in September last year because it was Chinas
first deepwater gas field discovery in the South China Sea. The field was discovered by Chinas first deepwater drilling rig,
CNOOC 981, which was completed in 2011.
The 100 billion cubic meter yield is significant even when placed against Beijings massive and still growing natural gas needs.
According to a recent report by the China Petroleum and Chemistry Industry Federation, Chinas natural gas consumption
amounted to 180 billion cubic meters last year, while proven reserves reached around 37 trillion cubic meters.

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2/12/2015

China Unveils Major South China Sea Gas Find | The Diplomat

Roughly a third of Chinas consumption was imported, however. China has been trying to decrease its reliance on other
countries partly by redoubling efforts to develop oil and gas extraction projects in the South China Sea. Lin Boqiang, an energy
expert from Xiamen University, told Global Times that although the State Council had urged the country to speed up such
efforts in November last year, the lack of deepwater exploration technology has reportedly been a key obstacle.
Despite the fresh hype over the size of the find, analysts have cautioned that it may take a few years for the necessary
infrastructure to be put in place in order for the field to actually contribute to domestic gas production.
While calculating energy reserves in the South China Sea very much remains an inexact science, one estimate claims that
about a third of Chinas current oil and gas reserves are offshore, and a third of those offshore reserves are in the South China
Sea, mostly in deepwater.

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