【Haichuan Sharing】Decided! Total investment of 39.6 billion! CNOOC Shell Huizhou Phase 3 Ethylene Project signed today

Building on Phase 1 of CNOOC Shell with a production capacity of 1 million tons per year of ethylene and Phase 2 with 1.2 million tons per year, Phase 3 adds another 1.5 million tons per year of ethylene production capacity; meanwhile, α-olefin, polyα-olefin, and metallocene polyethylene technologies are used for the first time in the Asia-Pacific region. Once the project is put into operation, it is expected to generate an output value of around 38.2 billion yuan per year. CNOOC, Shell Group, and Huizhou in Guangdong have once again joined forces. Their cooperation began in the 1990s with the Sino-foreign joint venture project of that era – the CNOOC Shell Nanhai Petrochemical Project. To date, the first and second phases of this project have been completed and put into operation; they constitute China’s largest ethylene production facility and are also Shell’s most profitable plant worldwide. With an ethylene production capacity of 2.2 million tons per year, these facilities are able to supply the market with over 6 million tons of high-quality, diversified petrochemical products each year.

CNOOC and Shell have a long-standing partnership. As early as 2000, the first phase of the CNOOC Shell South China Sea Petrochemical Project, which involved an investment of $4.35 billion, was established, becoming the largest Sino-foreign joint venture project in the country at that time. On November 1, 2002, the CNOOC Shell South China Sea Petrochemical Project drove its first pile by Daya Bay, marking the official commencement of what was then the largest Sino-foreign joint venture project in the country and signaling Huizhou’s entry into the global petrochemical industry. The second phase of the CNOOC Shell project in Huizhou, Guangdong – the second ethylene cracking unit and its associated facilities – came online officially in May 2018. The new units of the Phase II project were constructed by CNOOC, and are owned and operated by the joint venture CNOOC Shell Petrochemical Co., Ltd. (hereinafter referred to as “CNOOC Shell”). Once the new plant with an annual production capacity of 1.2 million tons of ethylene comes online, CNOOC Shell’s production capacity will double, enabling it to take advantage of deep integration in refining and chemical processing alongside the CNOOC refinery (Huizhou Petrochemical), which is located just next to it. The project also includes the largest styrene and propylene oxide (SMPO) production facility in the country at present. The project utilizes a number of industry-leading technologies both domestically and internationally, including Shell’s proprietary OMEGA, SMPO, and polyether polyol technologies for the production of ethylene oxide, ethylene glycol, propylene oxide, and high-quality polyether polyols, as well as advanced technologies for the production of polyolefins, phenol, and carbonyl alcohols. This is the first time in China that the industry-leading Shell OMEGA and polyol technologies have been used. Compared to CNOOC Shell Phase I, the ethylene project of Phase II for chemical production (the expansion project) differs in terms of scale and technical standards: 1. The ethylene production capacity of Phase II is 1.2 million tons per year, which is an increase compared to Phase I’s capacity of 1 million tons per year ； 2. The second-phase project introduces more end products to the domestic market, such as phenol, propylene, and low-density linear polyethylene – products that were not available in the first phase. This complementary product portfolio enables a better fulfillment of the market’s demand for various chemical products. Upon completion of the expansion project, CNOOC Shell will become the plant with the largest ethylene production capacity in China, as well as one of the largest ethylene plants in Asia. It will also be Shell’s largest petrochemical complex worldwide. 3. Compared with the first-phase project, the new styrene/propane oxide (SMPO) plant features over 200 technical improvements, which will further enhance overall energy efficiency and process safety, resulting in a 10%–15% reduction in energy consumption within the plant.