Shell and CNOOC sign joint venture
30 Oct 2000
A joint venture contract for a $4 billion petrochemicals complex in southern China was signed last week by Wei Liucheng, President of China National Offshore Oil Corporation (CNOOC), and Evert Henkes, chief executive of Shell Chemicals.
The signing paves the way for the formation of a joint venture company which plans to build a petrochemical complex at the Daya Bay Economic and Technical Development Zone, Guangdong Province.
The joint venture partners are Shell Nanhai BV with 50 per cent shareholding and CNOOC Petrochemicals Investment Limited (CPIL), also with 50 per cent. CPIL is owned by CNOOC (90%) and the Guangdong Investment & Development Company (10%). The new joint venture will be called the CNOOC and Shell Petrochemicals Company Ltd.
The major features of the project are an 800,000 tonne per annum (tpa) ethylene cracker; a 560,000 tpa styrene monomer and 250,000 tpa propylene oxide plant; a 320,000 tpa ethylene glycol plant; a 240,000 tpa polypropylene plant; a high density polyethylene plant of 200,000 tpa with capability to produce linear low density polyethylene; and a low density polyethylene plant of 250,000 tpa with integrated support facilities and utilities.
The next step is to obtain government approval of the contract and associated contracts and licences, following which the joint venture can be formed.
The first activity of the new joint venture will be to start a Definition Phase. This is expected to take 18-20 months and involves preparing basic design engineering packages; completing an updated Environmental Impact Assessment, preparing bid packages for the engineering, procurement and construction phase of the project and arranging financing.
Major construction work is expected to start in early 2003 and the complex is scheduled to start operations at the end of 2005.
Once completed, the joint venture company will produce about 2.3 million tonnes per year of products, generating up to US$1.7 billion in products sales, primarily supplying customers in Guangdong and the high consumption areas of China's coastal economic zones.
