Shell partners with CNOOC, Guangdong Government, ExxonMobil on offshore carbon capture and storage hub in China
Jun 28, 2022
Shell has signed a Memorandum of Understanding (MoU) with CNOOC, Guangdong Provincial Development and Reform Commission and ExxonMobil to explore the feasibility of developing a carbon capture and storage (CCS) hub in the Daya Bay National Economic and Technological Development Zone in Huizhou, Guangdong Province, China.
The four parties intend to explore the development of the CCS hub to capture up to 10 million tonnes of CO2 a year. If successful, it will be China’s first offshore large-scale CCS hub which could help reduce significant CO2 emissions of the Daya Bay National Economic and Technological Development Zone and serve the decarbonisation needs of the enterprises in the area.
Following the MoU, parties will seek to conduct a joint study to:
- Assess the technical solution
- Develop the commercial model
- Work with government to develop enabling policies
“China has an ambitious decarbonisation path – from about 10 billion tons of CO2 emissions a year to net-zero within 30 years,” said Jason Wong, Executive Chairman of Shell Companies in China. “A shift to cleaner energy sources and energy efficiency will not be enough. China will also need to actively remove emissions. This makes CCS an essential part of the solution for China to achieve carbon peak by 2030 and carbon neutrality by 2060. We are keen to collaborate with partners to help accelerate the development of CCS in China and make contributions to China’s carbon targets.”
“The surging demand for CCS in China provides Shell with a substantial opportunity to grow its sectoral decarbonisation business,” said Anna Mascolo, Executive Vice President of Shell Emerging Energy Solutions. “To that end, Shell has been proactively working with CNOOC and other partners to evaluate the Daya Bay CCS Hub, not only to secure the option to reduce the emissions from our expanding Nanhai petrochemical plant and other industrial players in the area, but also to help integrate and scale up Shell’s growing low-carbon energy offerings in the country.”
CCS offers a way to reduce emissions from sectors that are hard to decarbonise. Shell CCS Strategy is a key pillar of its climate target to become a net-zero emissions energy business by 2050 and its ambition is to have access to at least 25 million tonnes a year of CCS capacity by 2035.
Notes to editors:
- Daya Bay National Economic and Technological Development Zone, approved by the State Council of China in May 1993, is located in the southern part of Huizhou in Guangdong Province. It is adjacent to City Pingshan District, 47 nautical miles from Hong Kong, about 60km from the Shenzhen city center, and about 120km from the Dongguan city center. It has a positive investment climate and is the only petrochemical base in the eastern coast of the Pearl River Delta. The central, provincial, municipal governments attach considerable importance to and place high hopes on the development of Daya Bay. In September 2014, Daya Bay Petrochemical Zone was listed as a national petrochemical industrial base, which was the only petrochemical industrial base in Guangdong Province that was included in the list. The Development Plan for the Pan-Daya-Bay Area adopted by the provincial government clearly puts forward to build a world-class petrochemical industrial base in Daya Bay. (Source: http://www.dayawan.gov.cn/dywywwz/introduction/content/post_2810310.html)
- China has significant geological potential for storing carbon: an estimated 2,400 gigatonnes (Gt) in storage capacity, second only to the USA. It currently has more than 40 CCUS pilot projects with a total capacity of 3 million tons. Many of these projects are small developments linked with enhanced oil recovery. This will need to scale up significantly over the next four decades.In a net-zero emissions energy system, a little more than 1.3 Gt of CO2 a year will need to be captured and permanently stored in 2060. This means CCUS capacity will need to increase more than 400 times in the next four decades. While this is technically possible, as many of the CCUS technologies in China are close to or have reached commercialisation, the main challenge lies in creating conditions to support substantial investment in large-scale CCUS, particularly as a solution to industrial decarbonisation. (Source: Shell scenario Sketch ‘Achieving a carbon-neutral energy system in China by 2060’. Link to the full report: https://www.shell.com.cn/en_cn/promos/energy-and-innovation/china-scenario-sketch/_jcr_content.stream/1642171116580/9c08ca486937fc6153a981cde04539f28f90f733/china-sketch-narrative.pdf)
About Shell in China:
All of Shell's core businesses have grown considerably in China. Shell works with PetroChina and CNOOC to develop onshore and offshore oil and gas resources in China and overseas. This includes the Changbei onshore gas project, developed in collaboration with PetroChina. Shell is also one of the leading suppliers of LNG in China.
Shell operates a retail network of near 1,900 gas stations in China through joint ventures and wholly owned enterprises, with more than 2,000 charging points for electric vehicles. Shell has five lubricant blending plants and one grease production plant in China. It also operates a world-class petrochemical plant in the Daya Bay area of Huizhou City, Guangdong Province, in a joint venture with CNOOC.
Shell Energy (China) Co., Ltd. is an important part of Shell's global trading network, providing Chinese clients with a competitive and diversified LNG portfolio, power trading and carbon asset management and trading solutions. Shell Ventures has a dedicated team in China to accelerate innovation in the energy and mobility sector by investing in disruptive technologies and business models outside the company.
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Media China: SCHINA-Spokesperson@shell.com
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