CNOOC, Shell and Huizhou Government sign agreement to further expand petrochemical complex in China
May 17, 2020
CNOOC Oil & Petrochemicals Co. Ltd (CNOOC), Shell Nanhai B.V (Shell) and the Huizhou Government today announce a strategic cooperation agreement to further expand the CNOOC and Shell Petrochemical Company (CSPC) 50:50 joint venture in Huizhou, Guangdong Province, China.
Due to COVID-19 travel restrictions, the agreement was signed in a virtual online ceremony, attended by dignitaries including Party Secretary of Guangdong Province Li Xi, CNOOC Chairman Wang Dongjin, Shell CEO Ben van Beurden, CNOOC VP for Downstream Chen Bi and Shell Downstream Director Huibert Vigeveno.
The expansion is planned to serve the growing number of intermediate and performance chemicals customers in the key market of China, supplying products including SMPO, polyols, ethylene glycol, polyethylene and polypropylene. These chemicals are used in a wide range of end products, in healthcare, construction, fabrics, packaging, transport and electronics. For the first time in Asia, Shell would apply its advanced technology for linear alpha olefins. The project is intended to include construction of a new 1.5 million-tonnes-per-year ethylene cracker, with the mega-site bringing economies of scale and enhanced competitiveness.
Thomas Casparie, Executive Vice Present for Shell’s global chemicals business, said “Our growth strategy is based on long-term chemicals demand. We are very selective in our investments, and this agreement underlines Shell’s confidence in both the chemicals business fundamentals and our strategic partnerships with CNOOC and the Huizhou Government.”
The CSPC site currently converts a variety of liquid feedstocks into olefins and derivative products. It has a strong track record of safe, reliable and energy-efficient operations. In January 2020, CNOOC and Shell announced the signature of a Memorandum of Understanding to explore its first commercial-scale polycarbonate production unit at the site.
Notes to Editors
- The two partners signed Memorandum of Understanding on 16 October 2018 to explore expansion of the existing collaboration.
- The start-up of the site’s second ethylene cracker was announced on 2 May 2018. The site’s second SMPO plant, which will be the largest in China, is currently in construction.
About Shell in China
All of 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, including Changbei onshore gas development project, helping to fuel the country’s fast-growing economy. Shell is also an LNG supplier to China.
Shell has a large network of more than 1,500 petrol stations in the country, operated through joint ventures and wholly owned companies. Shell is one of the leading international lubricants providers, bitumen manufacturers and marketers in China, with five lubricants blending plants and one grease plant in the country. CNOOC and Shell Petrochemicals Company which is a JV between Shell and CNOOC, operates a world-class petrochemical complex in Daya Bay, Guangdong.
Shell Energy (China) is a new addition to the Downstream businesses in China, engaging in the country’s emerging carbon trading business. Shell Ventures has a dedicated team in China participating in the country’s start-ups ecosystem and exploring investment opportunities.
China National Offshore Oil Corporation (CNOOC), the largest offshore oil & gas producer in China.
The company was founded in 1982 and is headquartered in Beijing. After over 30 years of reform and development, CNOOC has become an international energy company with prominent core business, a complete industrial chain and business spreading across 40 countries and regions. The company has formed five main business segments: oil & gas exploration and development, engineering and technical services, refining and marketing, natural gas and power generation, and financial services.
CNOOC’s core operation areas are Bohai, Western South China Sea, Eastern South China Sea and East China Sea in offshore China. Overseas, the Group has oil and gas assets in Asia, Africa, North America, South America, Oceania and Europe. The Company was ranked 63rd in 2019 Fortune Global 500 and 32nd in Petroleum Intelligence Weekly’s 2018 World's Top 50 Oil Companies.
CNOOC and Shell Petrochemicals Company Limited (CSPC), established in 2000, is one of the largest petrochemicals joint ventures in China, incorporated by China National Offshore Oil Corporation (CMOOC), Royal Dutch Shell, and Guangdong Guangye Investment Group Company Limited (CPIL), with 50:50 Sino-foreign stakes.
CSPC (Nanhai Project) consists of two phased projects. Phase I started commercial operations in 2006 and Phase II (C2) started in 2018. CSPC increased its ethylene production capacity to 2,200 ktpa after C2’s start-up, and it can supply more than 6 million tonnes of high-quality products to the domestic market every year, becoming the biggest single-site ethylene plant operating in China.
Since its establishment, CSPC has committed to implementing a strategy of sustainable development and to fulfilling the commitment of Responsible Care®. CSPC always considers Health, Safety and Environment as the top priority, striving for the vision “To Be the Best Petrochemical Company in China”, and maintaining a strong track record of reliable and safe operations, environmental protection, energy saving and social responsibility. While having achieved good business performance, CSPC also makes contributions to social and economic development in local communities.
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