CSPC, a Shell-CNOOC joint venture, invests in petrochemical complex expansion in China
CHIGOZIE AMADI
CNOOC and Shell Petrochemicals Company Limited (CSPC), a joint venture between Shell Nanhai B.V. and CNOOC Petrochemicals Investment Ltd, has taken a final investment decision to expand its petrochemical complex in Daya Bay, Huizhou, south China.
The expansion will include a third ethylene cracker with a planned capacity of 1.6 million tonnes per year of ethylene, a key building block to make plastics, and associated downstream derivatives units producing chemicals including linear alpha olefins.
This investment also includes a new facility which will produce 320,000 tonnes per year of high-performance specialty chemicals, such as polycarbonates and carbonate solvents, critical for everyday life.
Linear alpha olefins are used to produce detergent alcohol and synthetic lubricants base oil. Polycarbonates make impact-resistant plastics that can replace carbon-intensive steel, whilst carbonate solvents are used in lithium-ion batteries and are essential for the electric vehicles sector as well as energy storage.
The new facilities, primarily aimed at meeting domestic demand in China, will produce a range of chemicals that are widely used in the agriculture, industrial, construction, healthcare and consumer goods sectors.
This investment will contribute to CSPC’s competitiveness by extending its value chains, drive further integration with the existing site, and enable greater innovation capability to meet customer demand in the fast-growing Chinese market.
“For more than two decades, CSPC has provided high value products to the market, becoming one of the largest petrochemical joint ventures in China.” said Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.
“This new investment is a key enabler to realise CSPC’s transformation strategy towards more premium and highly differentiated chemical products. It is consistent with Shell Chemicals & Products strategy to pursue targeted growth at advantaged locations. It also demonstrates our strong partnership with CNOOC.”
The expansion is expected to be completed in 2028.
Established in 2000, CSPC is a 50-50 joint venture owned by Shell Nanhai B.V., a subsidiary of Shell, and CNOOC Petrochemicals Investment Limited, an affiliate of China National Offshore Oil Corporation (CNOOC). Our joint venture with CNOOC has been a high-performing strategic partnership delivering, on average, returns significantly above our hurdle rate.
CSPC Phase I started commercial operations in 2006 and Phase II started in 2018. With an annual ethylene production capacity of 2.2 million tonnes, CSPC supplies more than 6 million tonnes of high-quality chemical products to the domestic market every year.
