China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) today announce the final investment decision to expand CNOOC and Shell Petrochemical Company’s (CSPC) existing 50:50 joint venture (JV) in Huizhou, Guangdong Province, China. This decision follows the announcement of a Heads of Agreement in December 2015 between the two partners. Subject to regulatory approvals, CNOOC and Shell have agreed that CSPC should take over CNOOC’s ongoing project to build additional chemical facilities next to CSPC’s petrochemical complex.
The project includes the ongoing construction of a new ethylene cracker and ethylene derivatives units, which will increase ethylene capacity by more than 1 million tonnes per year, about double the current capacity. It will also include a styrene monomer and propylene oxide (SMPO) plant, which will be the largest such plant ever built in China.
Graham van’t Hoff, Executive Vice President for Royal Dutch Shell plc’s global Chemicals business, said: “I’m pleased to confirm that we are going ahead with this growth project. We are selective in our investments, and this decision underlines our confidence in the strong growth potential for chemicals in China. It will position Shell and our partner CNOOC well to help meet the growing needs of customers in this expanding petrochemicals market.”
“The expansion of the Nanhai petrochemical complex supports the Chinese long-term petrochemicals development plan and mixed ownership reform direction. We’re delighted that Shell will contribute to the project and our joint venture with industry-leading technology, with improved value through integration with nearby CNOOC refineries to produce high quality petrochemicals for China’s growing domestic markets,” said Dong Xiaoli, General Manager Assistant of CNOOC and General Manager of CNOOC Oil & Petrochemicals Co., Ltd.
Shell will apply its proprietary OMEGA, SMPO and polyols technologies to produce 150,000 tonnes per annum (tpa) of ethylene oxide, 480,000 tpa of ethylene glycol and 600,000 tpa of high quality polyols. This increases the volumes and diversity of CSPC’s high quality product range to around 2 million tonnes per year, as well as enhances overall energy efficiency. It will be the first time that Shell’s industry-leading OMEGA and advanced polyols technologies will be applied in China.
The CSPC site, which has a strong track record of reliable and safe operations, currently converts a variety of liquid feedstocks into olefins and derivative products. These are used in a wide range of consumer goods, including computers, plastic bottles and washing liquids.
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About Shell in China
All Shell’s core businesses have operations in China.
Shell has onshore and offshore gas and oil development projects in partnership with PetroChina and CNOOC, both inside and outside China, which help to fuel the country’s fast-growing economy.
Shell’s Downstream business in China consists of 11 joint ventures and eight wholly-owned companies. In China, Shell is one of the leading international lubricants providers, and international bitumen manufacturers and marketers. Shell has a large network of about 1,100 petrol stations in China, operated through joint ventures. Shell has five lubricants blending plants, one grease plant and four bitumen plants in the country.
Shell’s cleaner coal technology has been adopted by its joint venture with Sinopec in Yueyang, Hunan Province and by 21 other Chinese industry customers through licences.
Shell Energy (China) is a new addition to the Downstream businesses in China. It is Shell’s Chinese trading entity and is actively engaged in the country’s burgeoning CO2 trade.
About CNOOC
China National Offshore Oil Corporation (CNOOC), the largest offshore oil & gas producer in China.
CNOOC has evolved from an upstream oil & gas company to an international energy company with promising core businesses and a complete industrial chain.
CNOOC businesses cover the main segments of oil & gas exploration and development, engineering & technical services, refining and marketing, natural gas and power generation, and financial services.
About CSPC
CNOOC and Shell Petrochemicals Company Limited (CSPC) was established in 2000 and commenced operations in 2006. It operates a world-scale petrochemical complex (known as “Nanhai”) in the Daya Bay Economic and Technological Development Zone, Huizhou, Guangdong Province. The joint venture partners are Shell Nanhai B.V., a company within the Royal Dutch Shell Group, with a 50% stake, and CNOOC Petrochemicals Investment Limited (CPIL), also with 50%. CPIL is owned by China National Offshore Oil Corporation (CNOOC) (90%) and Guangdong Guangye Investment Group Company Limited (10%). CSPC has over 1,100 employees.
Nanhai has a current capacity to convert 950,000 tonnes of ethylene per year into 2.7 million tonnes per year of derivative products to supply to the Chinese domestic market. CSPC has been implementing a strategy of sustainable development and delivering Responsible Care commitment in operating the complex. It is a highly successful venture that has been a top performer in Health, Safety, Environment, Reliability and Operational Excellence.
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