S China Sea gas field has 100b cubic meter reserve

China's first deepwater gas field in the South China Sea has proven reserves of more than 100 billion cubic meters, the country's largest producer of offshore gas, the China National Offshore Oil Corp (CNOOC) announced on Saturday.

The Lingshui 17-2 field, which was discovered in September 2014 and is located 150 kilometers south of South China's Hainan Province, has been identified as a large-scale gas field, demonstrating that the South China Sea has extensive exploitable oil and gas resources, China Central Television (CCTV) reported on Saturday.

The annual output of the Lingshui 17-2 field is expected to reach 3.5 to 4 billion cubic meters, Xie Yuhong, a manager with the CNOOC, was cited by CCTV as saying. "This figure is relatively conservative," Xie said.

China consumed 180 billion cubic meters of natural gas in 2014, according to a report released by the China Petroleum and Chemical Industry Federation, a non-governmental organization, in January 2015. By the end of 2014, China's proven reserves of exploitable natural gas amounted to 37 trillion cubic meters, according to the Ministry of Land and Resources.

Over 32 percent of the natural gas used by China in 2014 was imported and in 2013 the ratio was 31.6 percent, the report noted.

China's increasing reliance on other countries for its natural gas is risky as the country cannot store huge amounts of gas, like it can with oil, and its gas supplies could be affected by changes in bilateral relationships, said Lin Boqiang, an energy expert from Xiamen University.

The State Council in November 2014 urged the country to speed up the development of oil and gas extraction projects in the South China Seas in its five-year energy plan. "The majority of oil and gas resources in the South China Sea are in the form of deepwater reserves. The lack of deepwater exploitation technology was a key obstacle preventing China from conducting much extraction in this area previously," Lin said.

The CNOOC has made technological breakthroughs in high-temperature and high-pressure drilling. The Lingshui 17-2 field is also the first significant deepwater gas and oil discovery made by the semi-submersible CNOOC 981 rig.