CNOOC and Shell Petrochemicals to expand South China ethylene cracker and chemical complex

CNOOC and Shell Petrochemicals (CSPC), a joint venture between Shell Nanhai Limited and CNOOC Petrochemical Investment Co., Ltd., has made a final investment decision to expand its petrochemical complex in Daya Bay, Huizhou, southern China.

The expansion includes a third ethylene cracker with a planned annual production of 1.6 million tons of ethylene, and related downstream derivatives units to produce chemicals such as linear alpha olefins.

The investment also includes a new plant that will produce 320,000 tons per year of high-performance specialty chemicals such as polycarbonates and carbonate solvents that are essential to everyday life.

Linear alpha olefins are used to produce detergent alcohols and synthetic lubricant base stocks. Impact-resistant plastics made from polycarbonates can replace carbon-intensive steel, while carbonate solvents are used in lithium-ion batteries, which are essential to the electric vehicle industry and energy storage. The new plant, which is primarily designed to meet domestic demand in China, will produce a range of chemicals for use in the agricultural, industrial, construction, healthcare and consumer goods industries.

The investment will enhance CSPC's competitiveness by extending its value chain, driving further integration with existing plants and increasing innovation capabilities to meet customer needs in the fast-growing Chinese market. "For more than two decades, CSPC has been providing high-value products to the market, becoming one of the largest petrochemical joint ventures in China," said Huibert Vigeveno, Shell's Director of Downstream, Renewables and Energy Solutions.

"This new investment is a key enabler of CSPC's strategy to transform into higher-quality, differentiated chemicals. 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.