News Post

China National Offshore Oil Corp. (CNOOC) and Shell have reached a final investment decision (FID) to expand their existing 50:50 joint venture (JV), known as CSPC, in Huizhou, Guangdong Province, China, the companies announced today. 

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 chemicalfacilities 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 MMtpy, or 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.

“I’m pleased to confirm that we are going ahead with this growth project," said Graham van’t Hoff, executive vice president for Royal Dutch Shell’s global chemicals business. "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 expandingpetrochemicals market.”

Shell will apply its proprietary OMEGA, SMPO and polyols technologies to produce 150,000 tpy of ethylene oxide, 480,000 tpy of ethylene glycol and 600,000 tpy of high quality polyols. 

This increases the volumes and diversity of CSPC’s product range to around 2 MMtpy, as well as enhances overall energy efficiency. It will be the first time that Shell’s OMEGA and advanced polyols technologies will be applied in China.

“The expansion of the Nanhai petrochemical complex supports the Chinese long-term petrochemicalsdevelopment plan and mixed ownership reform direction," said Dong Xiaoli, general manager assistant of CNOOC and general manager of CNOOC Oil & Petrochemicals Co. "We’re delighted that Shell will contribute to the project and our joint venture with industry-leading technology, with improved value through integrationwith nearby CNOOC refineries to produce high-quality petrochemicals for China’s growing domestic markets.” 

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.