Integrated Gas & New Energies
Changbei tight gas, Shaanxi province:
Shell partners with PetroChina to develop Changbei tight gas field under a production sharing contract (PSC), supplying natural gas to the markets of Beijing, Tianjin, Shandong and Hebei.
Being the first onshore upstream cooperative development Shell has had in China, Changbei project started commercial production ahead of schedule in March 2007, in time to contribute to a green 2008 Beijing Olympics, and produces approximately 3.5 billion cubic meters (bcm) per year, which accounts for around 20% of Beijing’s annual gas consumption in 2016.
Thanks to Changbei’s operational excellence, outstanding safety performance and advanced drilling/operational technologies, the project is regarded by the partner as a model international cooperation project in China. The top management of PetroChina says: “Our upstream business should learn from Changbei.”
In July 2012, PetroChina and Shell signed a PSC amendment representing a new phase for the development of the existing Changbei block, adding scope to develop additional tight gas sands and further develop the already producing main reservoir.
Trading and Supply
Globally, Shell is the largest LNG provider and the leading LNG supplier to Greater China, with more than 14 million tons per annum (with BG combination), supplying LNG through long term contracts with CNPC and CNOOC.
Shell Energy China (SEC):
SEC is the trading entity for Shell in China, specializing in LNG and carbon emission trading. SEC is an integral part of Shell’s global trading network and one of the world’s leading carbon traders, and it is the first Wholly Owned Foreign Entity (WOFE) to participate in the Chinese emissions market.
For over 60 years Shell has been working hand in hand with Scuderia Ferrari in Formula One to develop high performance Shell Helix lubricants. Building on this legendary technical partnership, Shell provides Chinese customers with high-quality lubricants that can keep the engine clean and improve fuel economy.
China is the second largest lubricants market and the fastest-growing one across the world. Shell is the largest IOC lubricants manufacturer and marketer in China, with a double-digit growth of sales. Today China is the No.1 market for Shell core brands of Helix, Rimula and Tellus.
Currently, Shell has 4 lubricants blending plants in Tianjin, Zhapu and Zhuhai and one grease plant in Zhuhai in China. The Zhapu plant has the largest production capacity for Shell with a throughput of 400 million liters per year. The new Tianjin plant can produce 330 million liters per year and has the potential to expand to 500 million liters. Shell’s largest grease plant started commercial production in Zhuhai in the beginning of 2013.
Shell Helix is the official partner of China’s top-fight football league – Chinese Super league, and Shell Marine Products continue to be the market leader among IOCs.
Shell’s rapidly developing Retail network in China, the largest one among IOCs in the country, has over 1,100 branded sites in 12 Chinese municipal cities and provinces. China is the No.1 growth market for Shell’s retail business and we are working hard with our Chinese partners for further expansion to be the most preferred fuel retailer in China.
Shell operates its retail businesses via 7 JVs and 1 WOFE, and each day, Shell’s 15,000 frontline retail staff serve over 500,000 customers.
Shell provides high-quality fuel and convenience products differentiated by innovations and technology leadership, including the Main Grade Active Cleaning Technology and V-Power gasoline, and also the Non-Fuel Retailing offerings feature the flagship “Select” store and car care service etc.
Shell’s fuel scientists are based in Shell Shanghai Technology Centre, working with global fuel R&D centers to provide tailor-made R&D in fuels specifically fit for Chinese markets.
As one of the leading international bitumen suppliers, Shell offers a complete series of road bitumen products in China, and operates 4 bitumen manufacturing plants in Xi’an, Erzhou, Zhenjiang, Foshan and also work with selected Chinese partners to deploy PMB (Polymer Modified Bitumen) blending plants. Shell has made a unique contribution to the economic development and modernization of China by providing superior and high-quality bitumen products.
Shell Bitumen has been involved in many important projects over the years including the Hong Kong-Zhuhai-Macau Bridge, roads surrounding the Beijing Olympic Park, roofing bitumen supply for China Pavilion at Shanghai Expo in 2010 and the roads surrounding the Tiananmen Square.
CNOOC and Shell Petrochemicals Company Limited (CSPC), Guangdong Province:
Shell’s largest single investment in China to date is the US$4.1 billion CSPC petrochemical complex, a 50:50 joint venture between CNOOC and Shell (also known as the “Nanhai Project”).
Located in Daya Bay, Guangdong Province, the one of the largest Sino-foreign JV to-date started up in 2006 and has an annual ethylene capacity of 950,000 tons. Every year, it supplies around 2.7 million tons of ethylene and propylene derivative products to the China market to help meet the rapidly rising local demand.
CSPC has built and now operates the petrochemical complex with sustainable development principles. This ensures an economically sound project that contributes to social and economic progress in the local area, while maintaining a responsible approach to the environment and surrounding communities.
Its adoption of 13 licenses through international bidding ensures the complex operates at the cutting edge of technology and in an efficient and environmentally friendly way. For example, compared with traditional technologies, Shell's state-of-the-art Styrene Monomer/Propylene Oxide (SM/PO) process helps CSPC save at least 5.5 million tonnes of water every year. In another example, all of the waste gases emitted by the fuel tanks and the oil separators are recycled in CSPC to ensure an odour-free site.
Thanks to relentless efforts like these, CSPC has been recognized as an “Accredited Company in Environment Protection” by the Department of Environment Protection of Guangdong Province every year since 2008.
On 21st March 2016, Shell and CNOOC took Final Investment Decision (FID) on Phase 2 of the project, and it will increase the capacity of CSPC to 2.2 million tonnes of ethylene production. Shell will apply its proprietary OMEGA, SMPO and Polyols technologies to produce 150,000 tonnes per annum (tpa) of ethylene oxide, 280,000-480,000 tpa of ethylene glycol and 700,000 tpa of high quality polyols.
Projects and Technology
China is one of the key countries for Shell in terms of sourcing and procurement. Shell is leveraging China’s industrial capabilities in refining, supply & distribution to enhance our value chain, and each year Shell sources over US$ 1 billion from China. Through supplying to Shell, Chinese suppliers have been able to earn credibility and reputation internationally, and now over 530 Chinese suppliers are on Shell’s global qualified vendor list.
Shell Shanghai Technology Centre (SST):
SST is a world-class technology center dedicated to lubricants and fuels R&D.
As one of the R&D hubs, it is part of Shell’s global R&D network and works closely with Shell R&D centers in Hamburg of Germany and Houston of the USA.
SST covers a wide range of product applications including passenger car motor oils, heavy-duty engine oils, transmission fluids and other specialty oils and greases as well as fuel products. It is a powerful demonstration of Shell’s technology and innovation leadership, which creates a strong competitive edge for Shell’s products and service.
SST is also a bridge to connect Shell people with its customers
Offering the unique re-generable deSOX / CO2 removal technology - Cansolv:
Shell Cansolv provides a licensed technology for the removal of SO2 and CO2 from low pressure, post combustion flue gases. As the only working regenerable deSOX / CO2 removal technology on the market, it allows customers to use environmentally challenging energy sources such as high sulphur coal or high sulphur residue while still meeting emissions targets.
A Cansolv SO2 Scrubbing System has been licensed to China Guodian Corporation, one of China’s top five power generators, for a new 1.2 GW coal-fired power plant which is now in operation in Duyun, Guizhou province. This deployment represents the first use of re-generable flue gas de-sulphurisation technology in the Chinese power sector and will be using the world’s largest absorbers. By selecting our regenerable CANSOLV system, our customer can avoid more than one million tonnes per year of landfill produced from conventional non-regenerable systems.
Shell Cansolv is also opening up the opportunity for Chinese refineries to process high sulphur crude in an environmentally acceptable way. A contract signed with Sinopec’s Cangzhou Refinery in September 2013 and will be Cansolv’s first operating license for a Fluid Catalytic Cracker application in China.
Technology licensing and energy consultancy:
Shell provides a range of technology licensing, consultancy services and catalyst to more than 30 petrochemical and refinery customers in China. The consulting services could help our customers raise their margin or increase production by as much as 10%.
North and South America
- Shell-Total-CNPC-CNOOC consortium won PSC to develop the Libra Deepwater offshore Brazil.
- In Canada, CNPC and Shell are jointly developing an LNG export facility on the west coast of British Columbia.
- In the Gulf of Mexico, we have a number of development and production projects with CNOOC-Nexen Ltd, including the Deepwater Appomattox complex.
Europe, The Middle East and Africa
- In 2012, CNOOC has 25% participating interest in Gabon in frontier offshore Deepwater exploration blocks BCD10 and BC9 operated by Shell.
- CNPC and Shell are also partners in the West Qurna 1 project in Iraq and Kashagan in Kazakhstan.
- Shell also has minor stakes in joint projects with Sinopec and Zhenhua Oil in Egypt.
- In 2010, Shell and CNPC jointly acquired Arrow Energy in Australia to develop coal bed methane for LNG export.
- Shell is also partnering with CNPC in the Browse LNG project.
- With CNOOC, Shell is undertaking frontier Deepwater exploration in the New Caledonia Basin offshore New Zealand.
- In Australia, CNOOC has 50% equity ownership in QCLNG Train 1 owned by Shell.
- QGC Pty Limited under Shell and CNOOC announced two-year development of its natural gas tenements west of Wandoan in 2015.
- CNOOC has 25% equity interest in upstream tenements held by Shell in the Surat and Bowen Basins and another 25% interest tenements in the Walloons Fairway region of the Surat Basin, Queensland.