Deepwater crane vessel sets off for S China Sea

China's first deepwater pipe-laying crane vessel set off from the coastal city of Qingdao on Tuesday, bound for the South China Sea, for trial operations.

The vessel is another part of the nation's expansion of offshore energy exploration and production, following the first wells drilled by China's first domestically produced deepwater drilling rig last week.

The new 2.8-billion yuan-vessel, which can lay pipes at depths of 3000 meters and lift 4,000 metric tons, will officially operate at the South China Sea's Liwan 3-1 gas field, which has water depths of 1,500 meters.

First, however, it will undergo a one-month trial in shallower waters, where it will lay about 1.5 kilometers of pipe for testing, said Xiao Long, general manager of the vessel project for China National Offshore Oil Corp.

Liwan 3-1 is the country's first deepwater natural gas field, and was discovered by Husky Energy Inc in 2006. It is set to start commercial production next year to supply gas to Zhuhai in Guangdong province.

The pipe-laying crane ship, together with the deepwater drilling platform, will help the company go from shallow waters to the more challenging deepwater, and protect China's energy security and national interests in the territorial waters, said Yang Hua, president of CNOOC, at the launch of the ship in Qingdao.

The vessel, known as Hai Yang Shi You 201, which started undergoing construction in September 2009, is part of CNOOC's deepwater fleet, which cost the company a total of 11.5 billion yuan ($1.8 billion).

The fleet, which has six pieces of machinery, is designed to meet the country's requirements to explore deepwater areas for sustainable energy supplies, said Jin Xiaojian, general manager of CNOOC's engineering department.

The construction pace accelerated in 2006 when the Liwan 3-1 field was discovered, boosting the company's confidence in the existence of oil and gas in the South China Sea, Jin said.

The drilling rig, the outfit's "flagship", officially started operating at the Liwan 6-1-1 field located 320 kilometers to the southeast of Hong Kong, marking the country's new era of deepwater exploration in the South China Sea.

The area is estimated to have about 16 trillion cubic meters of natural gas and about 30 billion tons of oil, which would account for one-third of China's total oil and gas resources, CNOOC has said.

The construction of equipment will reach a peak during the current Five-Year Plan (2011-15), buoyed by CNOOC's foray into deepwater, as well as big discoveries made in the Bohai Sea area in recent years, according to Jin.

He added that more than half of the company's investment in the upstream segment will go to the South China Sea during the five-year plan.

In tandem with the marine equipment surge, some domestic ship builders are eyeing the market for further growth.

Rongsheng Heavy Industries Group Holding Ltd, the builder of the deepwater pipe-laying crane vessel, set an ambitious target to set about 40 percent of its total sales from the marine engineering sector by the end of 2015, compared with 0.2 percent last year, said Chen Qiang, president of Rongsheng.

The pipe-laying crane ship is also the Hong Kong-listed ship builder's first project in the marine engineering area.

"We're actively seeking projects in the sector, and hope that orders from marine engineering will make up about 40 percent of our new orders this year, " Chen said.