Completed by 2028! CNOOC Shell plans to build a third ethylene cracking unit with a capacity of 1.6 million tons, along with various downstream derivative facilities

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On January 15, 2025, Shell (China) announced on its official website that CNOOC Shell Petrochemical Co., Ltd. – a joint venture between Shell South China Private Limited and CNOOC Petrochemical Investment Co., Ltd. – has made a final investment decision to expand its petrochemical complex located in Daya Bay, Huizhou, in southern China. The expansion project is expected to be completed in 2028. The third phase of the CNOOC Shell project includes the construction of a third ethylene cracking unit with a planned annual production capacity of 1.6 million tons, which serves as a key component in the production of plastics, as well as a range of downstream processing units for producing products such as linear alpha-olefins. This investment will also involve the construction of a new facility for producing high-performance specialty chemicals, such as polycarbonates and carbonate solvents that are essential for daily life. Linear α-olefins possess advantages such as good chemical stability, excellent thermal stability, high hydrophobicity, and strong polymerization capacity; they can be used to produce plasticizers, base oils for lubricants, as well as personal care products and industrial detergents in daily life. Polycarbonate (PC) is a transparent and impact-resistant plastic with good light transmittance, impact resistance, and resistance to ultraviolet radiation. It can replace steel, aluminum, and glass, and is used in transportation, construction, healthcare, and consumer goods industries. In daily life, the optical discs we see, camera components, disposable medical devices, and even skylights in buildings can all be made of polycarbonate. Carbonate solvents are one of the main components of lithium battery electrolytes. With the development of the electric vehicle market, the demand for lithium batteries and their upstream raw materials is also increasing. Furthermore, lithium-ion batteries play a significant role in electrochemical energy storage, so the electrolyte is equally crucial for the energy storage industry. CNOOC Shell CNOOC Shell was established in 2000 as a joint venture in which Shell South China Sea Pte Ltd, a wholly-owned subsidiary of Shell Group, and CNOOC Petrochemical Investment Co., Ltd., part of China National Offshore Oil Corporation, hold 50% stake each. Benefiting from a high-performing strategic partnership, this joint venture has consistently achieved an average return on investment that is significantly higher than Shell’s threshold return rate. CNOOC Shell Project Phase 1 began commercial operation in 2006, while Phase 2 started operations in 2018. The current annual ethylene production capacity is 2.2 million tons, with over 6 million tons of high-quality chemical products supplied to the domestic market each year.