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* Second-quarter adj earnings per share C$0.62 vs est C$0.57
* Total production up 10 pct at 310,000 boe/day
* Cash flow jumps 26 percent
* Says reduced volumes at Terra Nova field to hurt 3rd-qtroutput
July 25 (Reuters) - Husky Energy Inc, Canada's No.3 integrated oil company, reported a better-than-expectedquarterly profit as production rose and the company realizedhigher prices.
Husky, however, said reduced volumes due to a plannedshutdown at the Terra Nova oil field, off Newfoundland, willhurt third-quarter production.
Heavy oil producer Husky holds a 13 percent working interestin Terra Nova, which is operated by Suncor Energy Inc.
Husky, controlled by Hong Kong billionaire Li Ka-shing, saidthe C$6.5 billion Liwan Gas project in the South China Sea wason track to start production between late 2013 and early 2014.
The field lies 300 kilometers (186 miles) southeast of HongKong and will supply as much as 500 million cubic feet of gasper day to the Chinese market.
All nine wells at Liwan 3-1 are complete and ready forproduction, the company said.
Husky has been developing Liwan 3-1, the largest evernatural gas discovery offshore China, in partnership with CNOOC.
Husky's net income in the second quarter rose to C$605million ($588.1 million), or 59 Canadian cents per share, fromC$431 million, or 43 Canadian cents per share, a year earlier.
On an adjusted basis, the company earned 62 Canadian centsper share, topping analysts' average expectation of 57 Canadiancents per share, according to Thomson Reuters I/B/E/S.
Cash flow, a key measure of the company's ability to pay fornew projects and drilling, rose 26 percent to about C$1.45billion, or C$1.47 per share.
Total production in the quarter was 310,000 barrels of oilequivalent per day (boe/d), up 10 percent from a year earlier.Production weighted 73 percent towards oil and liquids, said thecompany, which owns refineries in Alberta, British Columbia andOhio.
Average realized prices for crude oil, natural gas liquidsand bitumen rose to $77.98 per barrel in the quarter from $71.61a year earlier, the company said.
U.S. realized refining margins averaged $20.24 per barrel,compared with $14.79 per barrel a year earlier.
Husky is also building the C$2.7 billion Sunrise oil sandsproject in northern Alberta. The 60,000-barrel-per-day project,co-owned with BP Plc, is expected to begin operationsnext year.
The company said the first phase of the project was about 70percent complete, with first production on track for 2014.
Preliminary design work on the next phase of Sunrise hasbeen completed and regulatory approvals are in place for a totalof 200,000 barrels per day of production, Husky said.
Shares of the company, which has a market value of aboutC$29.40 billion, closed at C$29.58 on the Toronto Stock Exchangeon Wednesday.
