Shell’s joint venture with CNOOC—the CNOOC Shell Chemical Complex—is investing in an expansion project for its chemical complex in China.
Release time:
2025-01-15 00:00
Source:
This project will include the construction of a third ethylene cracking unit with a planned annual capacity of 1.6 million tons, a key component in plastic production, as well as a series of newly built downstream derivative units, including linear alpha olefins.
This investment will also fund the construction of a new facility to produce high-performance specialty chemicals, such as polycarbonates and carbonate solvents—chemicals that are essential to daily life.
Linear α-olefins can be used to produce detergent alcohols and synthetic lubricant base oils. Polycarbonates can be used to manufacture impact-resistant plastics, replacing carbon-intensive steel, while carbonate solvents can be applied in lithium batteries, playing a crucial role in the electric vehicle sector and energy storage.
The new facility is primarily designed to meet China’s domestic demand and will produce a wide range of chemical products widely used in the agriculture, industrial, construction, healthcare, and consumer goods sectors.
This investment will enhance CNOOC Shell’s competitiveness by expanding its product value chain, further integrating it with its existing chemical plants, and fostering the development of its stronger innovation capabilities to meet the rapidly growing demands of Chinese market customers.
“For more than two decades, CNOOC Shell has been providing high-quality products to the Chinese market and has become one of China’s largest Sino-foreign joint venture petrochemical enterprises,” said Huibert Vigeveno, Director of Downstream and Renewable Energy at Shell Group.
“This new investment is a key driver in enabling CNOOC Shell’s strategic transformation toward higher-end and differentiated chemical products. This aligns with Shell Chemicals’ strategy of pursuing targeted business growth in regions where we have competitive advantages. It also underscores the strong partnership we have established with CNOOC.”
The expansion project is expected to be completed in 2028.
To the Editor
- CNOOC Shell was established in 2000 as a joint venture in which Shell South China Private Limited—a wholly-owned subsidiary of the Shell Group—and CNOOC Petrochemical Investment Co., Ltd., a subsidiary of China National Offshore Oil Corporation, each hold a 50% stake. Benefiting from a high-performance strategic partnership, this joint venture has consistently achieved average investment returns that significantly exceed Shell’s threshold return rate.
- The first-phase project of CNOOC Shell began commercial operations in 2006, and the second-phase project started commercial operations in 2018. Currently, its annual ethylene production capacity stands at 2.2 million tons, and it supplies over 6 million tons of high-quality chemical products to the domestic market each year.
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