CNOOC and Shell Petrochemicals (CSPC), a joint venture between Shell Nanhai and CNOOC Petrochemicals Investment, has announced plans to expand its petrochemical complex in Daya Bay, Huizhou, southern China.
The joint venture has approved a final investment decision aimed at increasing production capacity and strengthening its position in China’s petrochemical market.
The expansion will feature a third ethylene cracker capable of producing 1.6 million tonnes of ethylene per year, a critical raw material used in manufacturing plastics.
Additionally, 16 downstream chemical production units and supporting facilities will be constructed. These will produce various chemical products, including metallocene polyethylene, polypropylene, styrene, polyether polyols, ethylene glycol, and synthetic alcohols.
Shell’s proprietary process technologies will be deployed in seven of these units, marking their first application in Asia and China.
The project also involves the construction of a facility to produce 320,000 tonnes per year of high-performance speciality chemicals such as polycarbonates and carbonate solvents.
The Phase III expansion is expected to significantly increase CSPC’s output, with the total ethylene production capacity reaching 3.8 million tonnes per year upon completion. This growth will enable the production of over 10 million tonnes of petrochemical products annually.
Scheduled for completion in 2028, the expansion aims to address the growing domestic demand for advanced chemical products in China.
CSPC also announced a dedicated polycarbonate project within the expansion framework. The development includes a 260,000 tonnes per year polycarbonate production unit and supporting facilities, which are expected to be operational by 2026.
The polycarbonate project will use Shell’s proprietary production technology, designed to optimise energy use and reduce material costs.
In line with China’s “dual carbon” strategy, CSPC has integrated sustainability measures into the Phase III project. Initiatives include electrifying large compressor units and incorporating renewable energy sources, targeting a 20% reduction in carbon dioxide emissions.
CSPC was established in 2000 as a 50-50 joint venture between Shell and CNOOC. It began operations with Phase I in 2006 and expanded further with Phase II in 2018.
The existing complex has an annual ethylene production capacity of 2.2 million tonnes, supplying more than six million tonnes of chemical products annually to the domestic market.
Shell downstream, renewables and energy solutions director Huibert Vigeveno said: “For more than two decades, CSPC has provided high value products to the market, becoming one of the largest petrochemical joint ventures in China.
“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.”
