Expansions: Shell/CNOOC expand third phase of petchem complex in China; BPCL to build US$700 mn refinery/petchem project in Andhra Pradesh

Shell Petrochemicals Company Limited (CSPC), a joint venture between Shell Nanhai BV and CNOOC (China National Offshore Oil Corporation) Petrochemicals Investment Ltd, has taken a final investment decision to expand its petrochemical complex in Daya Bay, Huizhou, south China.

The expansion will include a third ethylene cracker with a planned capacity of 1.6 million tonnes/year of ethylene, a key building block to make plastics, and associated downstream derivatives units producing chemicals including linear alpha olefins. The expansion is expected to be completed in 2028.

This investment also includes a new facility which will produce 320,000 tonnes/year of high-performance specialty chemicals, such as polycarbonates and carbonate solvents.

Linear alpha olefins are used to produce detergent alcohol and synthetic lubricants base oil. Polycarbonates make impact-resistant plastics that can replace carbon-intensive steel, whilst carbonate solvents are used in lithium-ion batteries and are essential for the electric vehicles sector as well as energy storage.

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

This investment will contribute to CSPC’s competitiveness by extending its value chains, drive further integration with the existing site, and enable greater innovation capability to meet customer demand in the fast-growing Chinese market.

“For more than two decades, CSPC has provided high value products to the market, becoming one of the largest petrochemical joint ventures in China.” said Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.

“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. It also demonstrates our strong partnership with CNOOC.”

Established in 2000, CSPC is a 50-50 joint venture owned by Shell Nanhai, a subsidiary of Shell, and CNOOC Petrochemicals Investment Limited, an affiliate of CNOOC.

CSPC Phase I started commercial operations in 2006 and Phase II started in 2018. With an annual ethylene production capacity of 2.2 million tonnes, CSPC supplies more than 6 million tonnes of high-quality chemical products to the domestic market every year.

In other news, India’s Bharat Petroleum Corporation Ltd (BPCL) has picked Andhra Pradesh to set up a new oil refinery-cum-petrochemical complex, which may be the last greenfield project in India. The state-owned oil marketing company has an ambitious energy transition plan to transfer to net zero emissions.

In a regulatory filing to the stock exchanges, BPCL said its board “accorded its approval to commence pre-project activities for setting up a greenfield refinery cum petrochemical complex in east coast at Andhra Pradesh at an estimated cost of US$700 million.

BPCL did not reveal the timelines for completing the project.

According to BPCL, the pre-project activities include initial studies, land identification and acquisition, preparation of a detailed feasibility report, environment impact assessment, basic design engineering package, and front-end engineering design. The refinery could have a capacity of at least 180,000 barrels per day.

The planned unit in Andhra Pradesh is touted as India’s last greenfield refinery project.

BPCL is part of a consortium pursuing a 60 million tonnes/year refinery-cum-petrochemical complex on the west coast of Maharashtra, which was conceived six years ago but has yet to get off the drawing board due to land acquisition woes.

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