Joint venture starts up largest SMPO unit in China, takes major step in supply of performance polyols.

One new unit is the largest of its type in China, producing up to 630,000 tonnes per year of styrene monomer and 300,000 tonnes per year of propylene oxide. These chemicals are used in a wide range of applications, from household appliances to packaging and computers. The unit is also highly efficient. By using the Shell Group’s own SMPO process technology and making design improvements, it uses significantly less energy. It is the second unit of its kind built at the petrochemicals complex in Huizhou, Guangdong Province, China, which is operated by CSPC.

Three further new units process propylene oxide into up to 600,000 tonnes per year of polyols, deploying the Shell Group’s advanced polyols technologies for the first time in China. They supply customers with a range of polyols, including performance products for specialised uses such as coatings, adhesives, sealants and elastomers, and foams used in bedding, furniture and cars.

The start-up of the new units completes a successful ‘phase two’ expansion of the CSPC complex and follows the commissioning of a second ethylene cracker in 2018. The complex now supplies customers with up to six million tonnes per year of diverse, high-quality intermediate and performance chemicals, including polyols, ethylene glycol, polyethylene and polypropylene.

Plans are already being made for a third phase of expansion at the site. CNOOC, Shell and the Huizhou Government signed a strategic cooperation agreement in May 2020. The third phase would involve building a third ethylene cracker and deploying the Shell Group’s advanced technology for linear alpha olefins for the first time in Asia. Shell and CNOOC also announced a Memorandum of Understanding in 2020, to explore a commercial-scale polycarbonate production unit at the site, using the Shell Group’s diphenyl carbonate process technology.

Sun Dalu, Assistant President of CNOOC, Chairman and Secretary of the Party Committee of CNOOC Oil & Petrochemicals Co. Ltd, said “The successful start-up of the project has resulted in providing more premium chemical products for customers, promoting economic development of Huizhou City and the Guangdong-Hong Kong-Macau Greater Bay Area. We are dedicated to developing a trail-blazing and first-rate domestic petrochemicals industry in China. This is an essential strategic goal as we develop the CNOOC oil and petrochemical business. External collaboration is a key driver to realising this. We will continue to deepen our collaboration with Shell, as we mutually seek a bright future for the high-quality development of the CNOOC oil and petrochemical business.”

Thomas Casparie, Executive Vice President for the Shell Group’s global chemicals business, said: “This milestone supports Shell’s strategy to grow in performance chemicals, moving closer to the end customer. In starting these units up, our CSPC joint venture with CNOOC is improving the supply of essential chemicals to customers in China, with greater efficiency than ever. This is the power of the strategic partnerships we have built with CNOOC and the Huizhou Government, alongside the power of technological innovation. I would like to thank the CSPC team for the safe and successful start-up, and I congratulate them on the culture of positivity and continuous improvement they have developed.”

CSPC C2 Site

Shell JV starts up new petrochemicals units

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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.

About CSPC

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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