Husky operates and owns 49% of the offshore Liwan gas project, which lies about 300 kilometres south of Hong Kong, while CNOOC holds the remaining interest and buys the gas from Husky through a take-or-pay contract. Such an agreement requires CNOOC to pay for contracted volumes whether it receives them or not.
A pipeline outage in the first quarter affected natural gas sales from Liwan, and Husky said it received payment only for actual volumes of around 150 million cubic feet per day, roughly 50% of contracted volumes.
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