CNOOC and Shell's petrochemical project in Daya Bay advances

On Wednesday, CNOOC and Shell Petrochemicals (CSPC) began the final steps to invest in the expansion of its petrochemical complex project in Daya Bay of Huizhou, Guangdong province.

The 48 billion yuan ($6.7 billion) expansion is expected to be completed in 2028, marking the third phase of the gigantic project. It includes a new set of ethylene cracking units planned to annually produce 1.6 million tonnes of ethylene, a key component in making plastics.

The project will push CSPC's ethylene production capacity to 3.8 million tons per year, further solidifying its position as China's largest ethylene monomer plant.

Associated downstream derivatives facilities will also be constructed to produce a variety of chemicals. The list includes linear alpha olefins, which are used in detergent alcohol, polycarbonates and carbonate solvents.

Polycarbonates make impact-resistant plastics that can replace carbon-intensive steel, while carbonate solvents are used in lithium-ion batteries and are essential for the electric vehicle and energy storage sectors.

Primarily aimed at meeting domestic demand in China, the new facilities will also produce a range of chemicals that are widely used in the agriculture, industrial, construction, healthcare and consumer goods sectors.

Wang Jianbo, vice-president of CNOOC, said the expansion will contribute to constructing a global petrochemical industry highland in Huizhou and promoting high-quality development in Guangdong.

It is a key step in the new round of collaboration between CNOOC and Shell Group, said Wang.

Huibert Vigeveno, Shell's Downstream, Renewables and Energy Solutions director, said the new investment is a key enabler to realize CSPC's transformation strategy towards more premium and highly differentiated chemical products.

Daya Bay in Huizhou, a city in the Guangdong-Hong Kong-Macao Greater Bay Area, has become a major petrochemical production base, playing a role in the sustainable, high-quality development of Guangdong and the GBA.