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CNOOC and Shell Petrochemicals Company Limited (CSPC), a prominent joint venture between Shell and CNOOC, have officially greenlit a significant expansion of their petrochemical complex located in Daya Bay, Huizhou, in southern China. This strategic move will see the installation of a new, high-capacity ethylene cracker, capable of producing 1.6 million tonnes of ethylene per annum. Ethylene, a fundamental building block for various plastics, will serve as the cornerstone for a range of downstream production units, significantly enhancing CSPCs overall output.
The expansion project encompasses the development of crucial chemical production facilities, including:
• Linear Alpha Olefins (LAOs): These versatile chemicals find extensive applications in the production of detergent alcohols and synthetic lubricant base oils, catering to a diverse range of industrial needs.
• High-Performance Specialty Chemicals: This segment will see the production of cutting-edge materials such as polycarbonates, renowned for their exceptional impact resistance. Polycarbonates find widespread use in diverse applications, from automotive components and consumer electronics to construction materials. Furthermore, the expansion will include the production of carbonate solvents, crucial for the burgeoning electric vehicle sector, as these solvents play a vital role in the manufacturing of high-performance lithium-ion batteries.
This strategic expansion aligns perfectly with CSPCs overarching vision to transition towards the production of higher-value, differentiated chemical products. By significantly increasing its production capacity and diversifying its product portfolio, CSPC aims to solidify its position as a leading player in the dynamic Chinese market. This expansion will not only cater to the burgeoning domestic demand for a wide array of chemicals across various sectors, including agriculture, industry, construction, healthcare, and consumer goods, but also enhance CSPCs competitiveness within the global market.
Huibert Vigeveno, Shells Downstream, Renewables and Energy Solutions Director, emphasized the significance of this investment, stating, "This new investment is a key enabler to realize CSPCs 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 project is slated for completion by 2028, marking a significant milestone in CSPCs journey. This strategic expansion will not only bolster CSPCs production capabilities but also foster innovation and drive further integration within the existing complex, ultimately positioning the company for continued success in the dynamic and ever-evolving global petrochemical landscape.
CSPC, established in 2000, is a 50-50 joint venture between Shell Nanhai B.V., a subsidiary of Shell, and CNOOC Petrochemicals Investment Limited, an affiliate of China National Offshore Oil Corporation (CNOOC). This strategic partnership with CNOOC has consistently delivered exceptional performance, achieving returns well above the hurdle rate. CSPC began commercial operations with Phase I in 2006, followed by Phase II in 2018. With an annual ethylene production capacity of 2.2 million tonnes, the complex supplies over 6 million tonnes of high-quality chemical products to Chinas domestic market each year. |
