February 8, 2010 / 10:56 PM / in 8 years

UPDATE 1-Husky Energy taps another big gas field off China

* Third major natural gas discovery on Block 29/26

* Expects new find could produce as up to 90 mmcf/day

CALGARY, Alberta, Feb 8 (Reuters) - Husky Energy Inc (HSE.TO) said on Monday it made another big gas find off China’s coast, its third major discovery in the region, as mulls a spinoff of its Asian operations.

The company, controlled by Hong Kong magnate Li Ka-shing, said its Liuhua 29-1 exploration well in the South China Sea tapped what it called “a high-quality field” that could produce as much as 90 million feet a day.

The find is on the Block 29/26 about 300 km (186 miles) southeast of Hong Kong, near where Husky made its massive Liwan gas find in 2006 and the LH 34-2 gas field it discovered last year.

“The three natural gas fields ... have confirmed the resource potential as a major gas development project in the South China Sea and supports an earlier estimation of petroleum initially in place of 4 to 6 trillion cubic feet for the Block,” John Lau, Husky’s chief executive, said in a statement.

Husky is currently developing its Liwan find and expects to file its development plans with regulators later this year. It expects both its earlier discoveries to be commercially producing by 2013 and though its still assessing its latest find, the company expects it will be able to use Liwan’s infrastructure.

China’s state-controlled CNOOC Ltd (0883.HK) has the right to acquire a 51 percent stake in Husky’s discoveries on the offshore block.

Husky, Canada’s No. 3 oil exploration and refining firm, said last week it will decide by mid-year on whether to spin off its Asian offshore operations.

Monday’s announcement came after markets closed. Husky shares ended the day down 20 Canadian cents at C$26.64 on the Toronto Stock Exchange.

$1=$1.08 Canadian Reporting by Scott Haggett; editing by Rob Wilson

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