(Yicai Global) March 28 -- China National Offshore Oil, one of the country’s three oil giants, and UK petrochemical titan Shell have signed a CNY52.1 billion (USD7.6 billion) investment agreement for the third phase of an ethylene project in Huizhou, Guangdong province.

CNOOC and Shell Petrochemicals, a 50-50 joint venture between CNOOC and Shell, will oversee construction of an ethylene cracker with an annual output capacity of 1.6 million tons and 18 devices for downstream chemicals, four of which will use processes and technologies new in China, The Paper reported yesterday.

CSPC was the largest JV set up between a Chinese and foreign company in 2000. It completed the first and second phases of the Huizhou ethylene project in January 2006 and April 2018, with a total annual capacity of 2.2 million tons.

For the third phase, Beijing-based CNOOC and Shell, headquartered in London, inked a memorandum of understanding in October 2018 and a framework agreement in May 2020, when they said total investment would reach USD5.6 billion.

Once completed, the project will reduce China’s dependence on imports of many types of high-end chemicals, such as high-performance metallocene-based polyolefins, and meet demand in the Guangdong- Hong Kong- Macao Greater Bay Area, The Paper noted.

The official signing of the preliminary investment agreement shows the project has made essential progress, Wang Weizhong, deputy secretary of the Communist Party in Guangdong and the province’s governor, said during the signing ceremony held in Beijing yesterday.

Editor: Futura Costaglione