Chinese CNOOC to Begin $2.74 Billion Upgraded Refinery Complex

The China National Offshore Oil Company (CNOOC), a state-controlled entity, is preparing to inaugurate a refinery and petrochemical complex later this year after a significant $2.74-billion upgrade, as reported by Reuters on Tuesday, citing industry insiders.

The revamped joint venture complex, located on Daxie Island in Ningbo, will include a new 120,000-barrels-per-day (bpd) crude unit. This addition is expected to boost CNOOC’s crude import requirements later in the year. Once operational, the facility’s total crude processing capacity will surge by 50%, reaching 240,000 bpd.

With the launch of the upgraded refinery and petrochemical complex on Daxie Island, CNOOC’s overall crude processing capacity is projected to rise to approximately 1 million bpd, according to sources cited by Reuters. The complex is anticipated to commence operations by mid-2024.

The facility will also feature a catalytic cracker, a hydrocracker, a continuous reformer, and two polypropylene units, each with an annual capacity of 450,000 tons. These details were revealed in a recent procurement tender document reviewed by Reuters.

While CNOOC’s primary focus remains on oil and gas exploration and production, the state-owned firm is actively expanding its downstream operations. This move aligns with its broader strategy to diversify and strengthen its market presence.

In a related development, Shell Petrochemicals Company Limited (CSPC), a joint venture between Shell and CNOOC Petrochemicals Investment Ltd, recently finalised its decision to expand its petrochemical complex in Daya Bay, Huizhou, southern China.

The expansion will introduce a third ethylene cracker with an annual capacity of 1.6 million tons of ethylene, a crucial component for plastics production. Additionally, the project will include downstream derivatives units to produce essential chemicals, such as linear alpha olefins.

The investment, whose exact value Shell has not disclosed, will also fund a new facility capable of producing 320,000 tons annually of high-performance specialty chemicals, including polycarbonates and carbonate solvents, which are vital for everyday applications.

The expanded complex is primarily designed to cater to China’s domestic demand, with the project expected to be completed by 2028. This expansion underscores the growing importance of petrochemicals in supporting China’s industrial and consumer needs.

By optimising these developments, CNOOC and its partners are positioning themselves to play a pivotal role in China’s energy and petrochemical sectors, ensuring sustained growth and innovation in the years to come.