Shell, CNOOC finalise investment plan to expand China JV

SINGAPORE (ICIS)–Anglo-Dutch energy giant Shell and China National Offshore Oil Corp (CNOOC) on Tuesday said that they have finalised an investment plan to expand their existing petrochemical joint venture at Huizhou in China’s Guangdong province which involves a new ethylene cracker.

Shell Nanhai BV and CNOOC signed a heads of agreement (HOA) in December 2015 for the project, which will see the CNOOC and Shell Petrochemical Company (CSPC) taking over CNOOC’s ongoing project to build additional chemical facilities next to CSPC’s petrochemical complex, they said in a joint statement.


The existing petrochemicals complex Huizhou (Source: Shell, CNOOC)

The company did not disclose financial details of the project or a timeline as to when it expects the new facilities to come on stream.

The project includes the ongoing construction of a new ethylene cracker and ethylene derivatives units, which will increase ethylene capacity by more than 1m tonnes/year, about double the current capacity, the two firms said.

The current Nanhai complex has a current capacity to convert 950,000 tonnes of ethylene per year into 2.7m tonnes/year derivative products to supply to the Chinese domestic market.

The new project will also include a styrene monomer and propylene oxide (SMPO) plant, which will be the largest such plant ever built in China, they said.

Shell will apply its proprietary OMEGA, SMPO and Polyols technologies to produce 150,000 tonne/year of ethylene oxide, 480,000 tonnes/year of ethylene glycol and 600,000 tonnes/year of high quality polyols, according to the statement.

This increases the volumes and diversity of CSPC’s high quality product range to around 2m tonnes/year, it added.

The site in Huizhou converts a variety of liquid feedstocks into ethylene and derivative products, which are used in a wide range of consumer goods, including computers, plastic bottles, and washing liquids, the companies said.

CSPC is a 50:50 joint venture between China National Offshore Oil Corp (CNOOC) and Shell.