JV starts up largest SMPO unit in China

CNOOC Oil & Petrochemicals Co., Ltd (CNOOC) and Shell Nanhai B.V. (Shell) announced the start-up by their 50:50 joint venture, CNOOC and Shell Petrochemicals Company (CSPC), of new units to supply the Chinese market with essential petrochemicals.

One new unit is the largest of its type in China, producing up to 630,000 tonnes per year of styrene monomer and 300,000 tonnes per year of propylene oxide. These chemicals are used in a wide range of applications, from household appliances to packaging and computers. The unit is also highly efficient. By using the Shell Group’s own SMPO process technology and making design improvements, it uses significantly less energy. It is the second unit of its kind built at the petrochemicals complex in Huizhou, Guangdong Province, China, which is operated by CSPC.

Three further new units process propylene oxide into up to 600,000 tonnes per year of polyols, deploying the Shell Group’s advanced polyols technologies for the first time in China. They supply customers with a range of polyols, including performance products for specialised uses such as coatings, adhesives, sealants and elastomers, and foams used in bedding, furniture and cars.

The start-up of the new units completes a successful ‘phase two’ expansion of the CSPC complex and follows the commissioning of a second ethylene cracker in 2018. The complex now supplies customers with up to six million tonnes per year of diverse, high-quality intermediate and performance chemicals, including polyols, ethylene glycol, polyethylene and polypropylene.

Plans are already being made for a third phase of expansion at the site. CNOOC, Shell and the Huizhou Government signed a strategic cooperation agreement in May 2020. The third phase would involve building a third ethylene cracker and deploying the Shell Group’s advanced technology for linear alpha olefins for the first time in Asia. Shell and CNOOC also announced a Memorandum of Understanding in 2020, to explore a commercial-scale polycarbonate production unit at the site, using the Shell Group’s diphenyl carbonate process technology.

Sun Dalu, Assistant President of CNOOC, Chairman and Secretary of the Party Committee of CNOOC Oil & Petrochemicals Co. Ltd, said “The successful start-up of the project has resulted in providing more premium chemical products for customers, promoting economic development of Huizhou City and the Guangdong-Hong Kong-Macau Greater Bay Area. We are dedicated to developing a trail-blazing and first-rate domestic petrochemicals industry in China. This is an essential strategic goal as we develop the CNOOC oil and petrochemical business. External collaboration is a key driver to realising this. We will continue to deepen our collaboration with Shell, as we mutually seek a bright future for the high-quality development of the CNOOC oil and petrochemical business.”

Thomas Casparie, Executive Vice President for the Shell Group’s global chemicals business, said: “This milestone supports Shell’s strategy to grow in performance chemicals, moving closer to the end customer. In starting these units up, our CSPC joint venture with CNOOC is improving the supply of essential chemicals to customers in China, with greater efficiency than ever. This is the power of the strategic partnerships we have built with CNOOC and the Huizhou Government, alongside the power of technological innovation. I would like to thank the CSPC team for the safe and successful start-up, and I congratulate them on the culture of positivity and continuous improvement they have developed.”

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