* Lingshui 17-2 first gas due end-2021 - official
* Peak output estimated at 3.39 bcm/yr
* CNOOC unit in Zhanjiang plans $2.25 bln/yr capex 2020-2025
*
(Adds analyst comment; details of CNOOC unit's output targets)
By Muyu Xu and Chen Aizhu
SANYA, China/SINGAPORE, Sept 24 (Reuters) - China's national
offshore producer CNOOC Ltd 0883.HK expects its major
deepwater gas field Lingshui 17-2 in the South China Sea to
start its first gas production at the end of 2021, a company
executive said on Tuesday.
Chinese state-run energy producers are raising spending on
domestic oil and gas drilling to multi-year highs this year,
with a focus on cleaner-burning natural gas in a response to
Beijing's call to boost energy supply security.
The Lingshui field, with an average water depth of 1,450
metres (4,757 ft) at a distance of about 150 km (93 miles)
southeast from Sanya city of Hainan province, is the first
deepsea gas project operated by CNOOC and a key new field to
contribute to the firm's gas output.
Annual production of Lingshui 17-2 is estimated at 3.2
billion cubic metres (bcm), with maximum production likely to
reach 3.39 bcm, the executive told reporters and analysts in
Sanya, or roughly two percent of China' total gas output.
The executive did not give a timeline on when peak output is
expected to be reached.
The start-up timeline is about a year behind an earlier
indication by CNOOC, but analysts said development of such a
sizeable deepwater gas project can easily take four years from
2018 when Lingshui was first approved.
"We forecast first production in early 2022, because a
four-year timeframe is far more realistic for a new deepwater
project in an area with little existing infrastructure," said
Angus Rodger, research director for Asia-Pacific upstream
business with Wood Mackenzie.
"As CNOOC's first fully-operated deepwater project Lingshui
is a key test of its capabilities and the progress of its
in-house R&D in development technologies," Rodger said.
CNOOC is building a semi-submersible production platform for
the project, said the official, who declined to be named as he
is not the company's spokesman.
CNOOC is already a deepwater player in offshore Nigeria, the
Gulf of Mexico and Brazil, but mostly in tie-ups with seasoned
global players such as Total TOTF.PA and Exxon Mobil XOM.N .
When on stream, Lingshui 17-2, first discovered in the
Qiongdongnan basin in September 2014, will be the second deepsea
gas producer offshore China after Liwan, also in South China Sea
and which is operated by Canada's Husky Energy HSE.TO .
CNOOC Zhanjiang is the state oil firm's unit responsible for
developing the offshore waters in the western part of the South
China Sea including key projects such as Lingshui and Liwan.
The unit makes up about 18 percent of CNOOC's total oil and
gas output in offshore China.
While the Zhanjiang unit aims to maintain its crude oil
production at 4.5 to 5 million tonnes by 2025, its natural gas
output is expected to rise to 10 bcm by 2025, said the CNOOC
official, without giving current output levels for comparison.
New gas production will also come from expanding development
at existing fields such as Dongfang, Yuedong and Yacheng, the
official said.
An annual average of 16 billion yuan ($2.25 billion) will be
allocated for capital spending during the period.
($1 = 7.1052 Chinese yuan renminbi)