The CSPCL Nanhai complex at Daya Bay is the largest single investment ever made by the Shell Group in the petrochemicals sector – a $4.3 billion manufacturing plant in China.
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The plant will help meet burgeoning demand for plastics and petrochemicals in China where the economy grew 9.1% in 2004 – more than twice as fast as the United States (4.4%) and three times faster than the European Union (2.4%).
The new complex breaks records in China as the largest Sino-foreign joint venture. It is expected to generate US$1.7 billion in sales a year through the production of 2.3 million tonnes of olefins and first line derivatives. These products are building blocks for a long list of every day items including foams, plastics and packaging.
Shell has a 50% stake in the joint venture company - the CNOOC and Shell Petrochemicals Company (CSPC) - with the Chinese company CNOOC Petrochemicals Investment Limited (CPIL) holding the other 50%. The capacity to draw on the different strengths of the joint venture partners is crucial to the project’s success.
Learn how this unique partnership drives success at Daya Bay
Strategic location
Strategically located in Guangdong, China’s wealthiest province, the plant is close to key customers in China’s rapidly developing cities on the south-east coast. Almost all the plant’s products will be sold in China, more than half in Guangdong.
The investment is fundamental to the Shell Chemicals strategy to invest in China where demand for plastics and packaging is expected to make up 30% of world consumption by 2010.
Link to more information on the site's location
Early progress
Once construction began on 1 November 2002, the very day that the final investment decision was made, CSPCL made significant progress. At the peak of construction around 20,000 staff and contractors worked on the site.
On 11 May 2005, CSPCL signed its first over-the-fence agreement. Under the agreement, CSPCL will supply raffinate to neighbouring firm Huizhou MMA (HMC). HMC will extract the isobutylene and return it to CSPC to make high strength plastics and resins.
At the end of 2005, it was announced that construction was complete and final preparations were being made for start-up. On the 31 March 2006 a start-up ceremony was held by CNOOC and Shell Chemicals to celebrate the plant having gone into commercial operation. The construction of the world-class facility was completed within the expected schedule and budget.
State-of-the-art technologies
The complex is one of the world’s most technically advanced petrochemical facilities. It centres on an 800,000 tonnes per annum flexible cracker that can crack a variety of feedstock, from light naphtha to heavy condensate. Feedstock is imported through a new berth in the harbour and piped to the site via a 10 kilometre undersea pipeline.
This technology gives CSPCL a competitive advantage. Chinese crackers can currently process only naphtha, which is increasingly in short supply in China.
