China confirms discovery of world’s first large shallow-water gas field in disputed South China Sea

Beijing: China has confirmed the discovery of a large gas field with an estimated volume of over 100 billion cubic meters in the disputed South China Sea, a move likely to further fuel current military and diplomatic tensions between Beijing and other claimants in the region.

The original gas in place (OGIP) of the Lingshui 36-1 gas field – the world’s first large-scale ultra-shallow gas field in ultra-deep waters – is estimated at more than 100 billion cubic meters, the state-owned China National Offshore Oil Corporation (CNOOC) announced on Wednesday.

The relevant government authorities have released the data, it was said.

The Lingshui 36-1 gas field is located in the waters southeast of Hainan, China’s southernmost island province, the CNOOC said, but did not specify whether it was in the disputed waters of the South China Sea (SCS). The SCS is a hotly contested body of water. While China claims most of the SCS, the Philippines, Vietnam, Malaysia, Brunei and Taiwan have counterclaims. The US, EU, Japan and their allies support the small countries’ claims against China.

Observers believe that the discovery of a new, huge gas field will further increase existing tensions.

The CNOOC has estimated that the OGIP of the Yinggehai, Qiongdongnan and Zhujiangkou basins in the SCS is more than 1 trillion cubic metres.

Tensions are rising in the South SCS, a hotly contested and globally important waterway that has become a flashpoint for conflict primarily because of its rich oil, natural gas and fish reserves. It is also one of the world’s busiest shipping routes, carrying more than 20 percent of global trade.

The CNOOC statement also quoted Zhou Xinhuai, its president and CEO, as saying: “The South China Sea is an important region for the company to increase its natural gas reserves and production. The successful testing of Lingshui 36-1 expands the resource base for the development of a trillion cubic meter gas region in the South China Sea.”

“The company will continue to advance the exploration and development of hydrocarbon resources in the South China Sea and increase our energy supply capacity,” the Hong Kong-based South China Morning Post quoted Zhou as saying.

China is the world’s largest importer of natural gas and will spend around $64.3 billion on 120 million tons of liquefied and pipeline natural gas in 2023. The discovery of large reserves would strengthen the country’s energy security.

However, oil and gas development in South Carolina would likely involve diplomatic and political risks due to rival claimants, the Post report said.

In 2014, the deployment of CNOOC’s Ocean Oil-981 oil rig in a disputed area near the Paracel Islands in Vietnam sparked widespread anti-Chinese protests.

Beijing has also tried to stop other countries’ unilateral oil and gas production in the South China Sea.