SINGAPORE, Sept 27 (Reuters) - China's CNOOC Ltd

announced on Friday the start of production of phase-2 development at its fully-owned flagship deepwater gas project in the South China Sea.

Located in the Qiongdongnan Basin with an average water depth of about 900 meters, the new development at Shenhai-1 is expected to reach peak daily output of 162 million cubic feet of natural gas and 3,931 barrels of condensate in 2025, CNOOC said in a statement.

The main production facilities include a new fixed production platform and three centralized subsea wellheads, with 12 development wells planned to be commissioned.

"The project has successfully overcome the world-class challenge of deep-water high-pressure oil and gas reservoir development," Chairman Wang Dongjin said in the statement.

CNOOC began pumping gas from phase one of Shenhai-1 in June 2021, its first fully-owned deepwater gas project that marks a milestone in the state oil major's endeavour to master engineering and operational skills in developing deepwater oil and gas reserves.

With the new development announced on Friday, peak output at Shenhai-1, which translates to deepsea-1, would reach 4.5 billion cubic meters in 2025, roughly 1% of China's current natural gas consumption.

The gas field caters to southern China as well as Hong Kong and Macau.

(Reporting by Chen Aizhu; Editing by Eileen Soreng)

((aizhu.chen@thomsonreuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net))