CNOOC Oil & Petrochemicals Co. Ltd (CNOOC), Shell Nanhai B.V (Shell) and the Huizhou Government announced a strategic cooperation agreement to further expand the CNOOC and Shell Petrochemical Company (CSPC) 50:50 joint venture in Huizhou, Guangdong Province, China.
CSPC’s phase three petrochemical complex will include a 1.5 million metric ton per year ethylene cracker, as well as styrene, propylene oxide, polyols, ethylene glycol, polyethylene, and polypropylene units.
The new complex will also include the first α-olefins plant in Asia to use Shell technology.
The project is estimated to cost around $5.6 billion.
The two companies started the joint venture in 2006 and expanded it in 2018. Its ethylene capacity is now 2.2 million metric tons.
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.
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.”
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.