CNOOC and Shell’s China Expansion to Proceed

The new petrochemical complex planned by CNOOC Shell Petrochemicals Company (CSPC), a 50:50 joint venture of Royal Dutch Shell and China National Offshore Oil Corporation (CNOOC), at Huizhou in China’s Guangdong province is finally getting under way.

A final decision to invest in the new complex next to the jv’s existing Nanhai operations has been taken, the partners said in a statement. Planning for the project was kicked off in December 2015 with a Heads of Agreement, and the complex received clearance from Chinese authorities in November 2016.

The new production facilities to be built adjacent to CSPC’s existing petrochemical complex will include a new ethylene cracker and ethylene derivatives units, thereby increasing ethylene capacity by more than 1 million t/y, roughly double the current output capability. It will also include a styrene monomer and propylene oxide (SMPO) plant, claimed to be the largest such plant ever built in China.

Original start-up date was the fourth quarter of 2017. In 2016, around 70% of the work was said to be complete; the chemical producers gave no explanation for the long delay. No new start-up date was revealed.

Shell will leverage its proprietary OMEGA, SMPO and polyols technologies to produce 150,000 t/y of ethylene oxide, 480,000 t/y of ethylene glycol and 600,000 t/y of high quality polyols. The expansion “will increase volume and diversity” of the company’s high quality product range to around 2 million t/y as well as enhancing overall energy efficiency, CSPC said.

Graham van’t Hoff, executive vice president for Shell’s global chemicals business, said the oil and perochemicals group is “selective” in its investments. This decision underlines the group’s confidence in the strong growth potential for chemicals in China, he said. 

Dong Xiaoli, general manager assistant of CNOOC and general manager of CNOOC Oil & Petrochemicals Co, said the expansion of the Nanhai complex “supports the Chinese long-term petrochemicals development plan and mixed ownership reform direction. “