Our business in China

Today:

• Shell is one of the largest multi-national companies (MNC) operating in China
• Shell is the No. 1 IOC lubricants manufacturer and marketer in China
• Shell is the No. 1 IOC LNG supplier to China
• Shell is the No. 1 IOC bitumen supplier in China
• Shell is a leading IOC supplier of coal gasification technologies in China

Technology

• Unconventional gas
  Shell has developed cutting-edge technologies that enable us to produce unconventional gas in remote and difficult locations. In addition to our success in developing tight gas in Changbei and coal-bed methane in Shanxi Province, Shell is working with PetroChina in Sichuan Province on a tight gas project and a shale gas project.

• Petrochemicals
  World-class technologies are helping the CNOOC Shell Petrochemicals Company (CSPC, also known as "Nanhai Project") to produce petrochemicals in an efficient and environment-friendly way. For example, compared with traditional technology, one of Shell's proprietary technologies alone can help the plant save 5.5 million tons of water every year.

• Energy efficiency
  Shell provides technologies and solutions to Chinese refineries and can help them cut energy bills by as much as 10 per cent. Efforts are also made in saving energy in our own operations. In the last two years, the Nanhai project saved energy equivalent to 73,400 tonnes of standard coal. The energy saved is enough to power up over 110,000 urban households in China for a year.

• Differentiated oil products
  Shell provides Chinese customers with high-quality lubricants and fuel additives that can keep the engine clean and improve fuel economy.

• Coal gasification
  Shell has so far provided proprietary coal gasification technology in China through 19 licenses. The technology helps China use coal in a cleaner manner.

People
98 per cent of Shell and joint venture employees, and two-thirds of the China Country Coordination members, are China citizens. The total number of employees of Shell China is about 15,000. And over 100 Shell China employees have worked at Shell companies in other countries.

Partnership
Shell has formed partnership with all national oil companies in China, including PetroChina, Sinopec, CNOOC and Yanchang. Shell and our Chinese partners are collaborating in China and overseas in win-win partnerships.

Reputation
Shell is well recognised as a leading MNC. We received a number of awards for our high-quality products, good management and our social contribution, such as: Greener China Business Award, Company of Best HR Management in China, Top 10 Environmentally Responsible Companies in China Award and China Green Company Award, etc.

Shell China: further information

Shell seeks to provide energy solutions and contribute to the country’s three key energy priorities: security of energy supply, environmental protection and energy efficiency, working in partnership with Chinese companies and customers to mutual benefit both in China and overseas. All of Shell’s core businesses are represented in China: Upstream, Downstream and Projects and Technology.

Changbei gas development, Shaanxi
Shell is the operator of Changbei natural gas field under a Production Sharing Contract with PetroChina, signed in 2005. The field started commercial production on 1st March 2007 and reached the annual production target of 3 billion cubic metres in 2008, two years ahead of schedule. The current annual production target has been increased to 3.3 billion cubic metres with government approval since August 2010.

Changbei project achieved the record of drilling the longest horizontal section (2,251 m, Changbei 3-2, leg 1) of multi-lateral wells onshore China. Thanks to Changbei’s operational excellence and outstanding safety record, the top management of PetroChina says: “Our upstream business should learn from Changbei.”

Sichuan unconventional gas
Under a 30-year contract, Shell and CNPC will appraise and potentially develop tight gas reservoirs in an area of approximately 4,000 km2 in the Jinqiu block of central Sichuan Province. Shell also signed a joint assessment agreement with PetroChina in November 2009 for shale gas cooperation in Sichuan.  Assessment work commenced in January 2010 in the Fushun block that covers another area of approximately 4,000km2.

Coalbed Methane (CBM), Shanxi
Shell is developing the North Shilou CBM block jointly with PetroChina.  The project is now in the appraisal phase.

Liquefied Natural Gas (LNG)
Shell is the largest IOC LNG supplier to China in terms of contract volume following the two Sales and Purchase Agreements with Chinese partners in 2008, which will deliver 5 mtpa of LNG per year in the next decade in addition to other supplies of over 1 mtpa per year (Shell equity share) to Guangdong and Shanghai via our joint venture projects in Australia and Malaysia.

Hangzhou Natural Gas JV
Shell is a partner of the Hangzhou city ring joint venture that develops, operates and manages a high-pressure natural gas pipeline system in Hangzhou. Currently, the venture supplies about 500 million cubic metres of gas per annum to more than  400,000 households  and some industrial and commercial users in Hangzhou.

Lubricants
Shell became the leading international oil company marketing lubricants in China with the acquisition in September 2006 of a 75 per cent share in Tongyi, the largest independent lubricants marketer.  Sales of Shell-branded lubricants continue to show double-digit growth in the past years. Today China is the No.1 market for Shell core brands of Helix, Rimula and Tellus.

Currently, Shell has 6 lubricant blending plants in China. The world scale lubricant blending plant in Zhuhai, Guangdong Province, started up in end 2009 and produced Shell branded lubricants. The Zhuhai plant won the “Excellent Model of Zhuhai Construction Projects 2010” award. Shell’s first-ever Grease Manufacturing Plant in China is also under construction in Zhuhai.

In August 2011, Shell opens its first China Lubricants Technical Service Centre in Zhuhai.

Retail
The Shell retail business has set up joint ventures in Beijing, Tianjin, Sichuan, Chongqing, Guangdong, Shaanxi and Jiangsu, operating around 700 filling stations. 

Bitumen
Shell has 12 bitumen and 2 asphalt production bases in China, manufacturing high quality emulsion, Polymer Modified Bitumen and bitumen asphalt to serve customers in different parts of the country. Almost all provinces and major highway projects in China have used high quality Shell bitumen, including roads surrounding Tiananmen Square, the major sites of 2008 Beijing Olympics, and the Shanghai World Expo sites. Shell has also made an entry into China’s high-speed railway market as the only international bitumen marketer in this segment.

GTL (Gas to Liquids) Fuel
Shell GTL Fuel has been tested and demonstrated in the public transport in Shanghai, Beijing and Tianjin. The trial results have shown that Shell GTL fuel can be safely applied on the engines and buses made by Chinese OEMs without the need for modification. It can significantly reduce vehicle emissions, for example, smoke is reduced by about 70 per cent on Euro 2 and Euro 3 standard buses. In 2008, Shell GTL fuel powered 35 VW passenger cars to transport officials, athletes and reporters amongst Olympic venues.

Chemicals: Nanhai Project
Shell’s largest single investment in China to date is the US$4.1 billion Nanhai petrochemicals joint venture with CNOOC (50:50) in Daya Bay, Guangdong Province), which started up early 2006 on time and within budget. In April 2010, the plant has completed a turnaround and de-bottlenecking project safely, within budget and ahead of schedule. Its ethylene capacity has been raised from 800 ktpa to 950 ktpa, with total petrochemical production capacity at the site increasing from 2.3 million to 2.7 million tonnes per annum.

Petrochemicals
Shell is a market leader in supplying a variety of petrochemical products such as ethylene glycols, styrene monomer, higher olefins and derivatives, polyol, solvents and PDO / PTT.

Integrated Downstream Project
PetroChina, Qatar Petroleum International Limited (QPI) and Shell are undertaking joint development of a world-scale refinery and petrochemical manufacturing complex in China.

Clean Coal Energy (CCE)
Shell has so far provided its proprietary coal gasification technology in China through 19 licenses supported by a Clean Coal Service Centre in Beijing. Shell (50 per cent) and Sinopec (50 per cent) has a joint venture that operates a 2,000 ton/day coal gasification plant at Yueyang, Hunan Province. Shell has qualified 11 Chinese vendors to supply more than 98% of key equipment and parts for the Shell Coal Gasification Process (SCGP). This has enhanced the competitiveness of Shell’s technology by reducing both costs and delivery time.

Shell and Wison Engineering Ltd. (Wison) in February 2011 entered an agreement to jointly develop a new, low-cost “hybrid” gasification technology demonstration plant in China.

Technology licensing and energy consultancy
Shell Global Solutions International (SGSi) provides a range of technology licensing and energy consultancy services to coal gasification, petrochemical and refinery clients in China. Its consulting services in energy saving have helped customers cut energy bills by as much as 10 per cent. SGSI also supplies China customers with various advanced catalysts used in the refining and petrochemical industry.

Supporting China’s transition to a low carbon economy
Shell is a member of the China Council for International Cooperation on Environment and Development (CCICED), and supports several major low-carbon economy initiatives in China.

Shell has entered into a two-year agreement with the central government think tank the Development Research Centre under State Council to jointly study the mid-long term energy strategy for China.

Social investment

We aim to be a good neighbour in the societies where we operate. This means not only running our facilities cleanly and safely, but building strong relationships with local communities, and together finding ways for our operations to contribute to their development. Shell’s social investment in China focuses on education about energy and the environment, and building capacity.

Our key projects include the Better Environment Scheme, Youth Sustainable Energy Education, the Shell Rural Energy Fellowship, New Venture China and the 5.12 micro-finance project. In addition, Shell China made donations to the disaster relief efforts that followed the Wenchuan earthquake, Yushu earthquake and Zhouqu mudslide.