China National Offshore Oil Corporation (CNOOC), a state-owned company, is preparing to launch a new refinery and petrochemicals complex later this year after a $2.74 billion upgrade, Reuters reported on Tuesday, citing industry sources.
The upgraded joint venture complex, located on Daxie Island in Ningbo, will include a 120,000 barrels-per-day (bpd) crude processing unit. This addition could increase CNOOC’s need to import crude oil later this year. With the new unit, the facility’s crude processing capacity will rise by 50%, reaching 240,000 bpd.
Once completed, CNOOC’s total crude processing capacity will approach 1 million bpd with the new refinery and petrochemical complex, the sources told Reuters.
The complex is expected to begin operations in the middle of this year, according to the sources.
In addition to the crude processing unit, the complex will feature a catalytic cracker, a hydrocracker, a continuous reformer, and two polypropylene units. Each polypropylene unit will have an annual capacity of 450,000 tons, based on a recent procurement tender document from CNOOC, which Reuters has seen.
While CNOOC’s main focus remains on oil and gas exploration and production, the company is also expanding its downstream operations.
Last month, Shell Petrochemicals Company Limited (CSPC), a joint venture between Shell and CNOOC Petrochemicals Investment Ltd, decided to expand its petrochemical complex in Daya Bay, Huizhou, in southern China.
This expansion will include a third ethylene cracker, with a planned capacity of 1.6 million tons per year of ethylene, a key ingredient for plastics production, as well as additional downstream units that will produce chemicals like linear alpha olefins.
CSPC’s investment, which Shell did not disclose, will also fund a new facility designed to produce 320,000 tons per year of high-performance specialty chemicals, such as polycarbonates and carbonate solvents. These chemicals are essential for many everyday products.
The expanded complex will primarily serve the growing domestic demand in China, with the project expected to be completed by 2028.
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