sustainable development and petrochemical production in china: the shell/cnooc nanhai project dr....
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Sustainable Development and Petrochemical Production in China: The Shell/CNOOC Nanhai Project
Dr. Joseph M. MachadoSustainable Development Manager, Shell ChemicalsChina and Sustainable DevelopmentRice University, HoustonSeptember 27, 2004
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Presentation Roadmap
• What is Shell Chemicals?
• Why China?
• What is the Nanhai project?
• What are the Sustainable Development issues?
The expression “Shell Chemicals” refers to the companies of the Royal Dutch/Shell Group of companies which are engaged in the
chemicals business. Each of the companies that make up the Royal Dutch/Shell Group of companies is an independent entity and
has its own separate identity.
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What is Shell Chemicals?
21Number of sites
~8500Number of employees
$10 blnCapital employed
11Number of businesses
$15 blnAnnual proceeds
Global strategies, processes and manufacturing assets
Manufactures the basic chemical building blocks enabling the products of modern life
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Shell Chemicals portfolio is well integrated…
Lower Olefins
Additives
Polypropylene
Polyethylene
Aromatics
Catalysts
Styrene monomer/ propylene oxide
Solvents
Propane diol/ Corterra
Ethylene Oxide/ Glycols
Phenol
Higher olefins & derivatives
Base Chemicals Intermediates SpecialitiesPolymers
Basell
CRI
Infineum
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…with assets focused on world-scale sites
RefineryPetrochemical
Excludes down-stream ventures
Nanhai
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Why China?
Size, growth —more like a continent than a country
Hong Kong
Shanghai
Beijing
• Population 1.3 billion
• Area 3.6 million sq. miles
• Economy $5.56 t. on PPP basis
• Railways 44,500 miles
• Highways 870,000 miles
Nanhai
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China petrochemicals demand: ethylene derivatives
0
5000
10000
15000
20000
25000
30000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Year
MT
'000
Source: Parpinelli Tecnon2003 estimated
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SD challenges: tied to economic development
ConsumerEconomy1 billion
Transitioneconomy2 billion
Survivaleconomy3 billion
USA today
China today
Reducing environmental impacts, health risks
Coping with growth, creating infrastructure
Meeting basic human needs
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Shell Strengths: • Brand & global reach• Shell China’s portfolio positions • Sustainable Development • Advanced technologies
“To be the leading multinational company supplying clean energy, oil products and petrochemicals in China,
under the framework of sustainable development.”
What is the Nanhai project?
CNOOC Strengths: • Profitable, state owned, commercially driven • 3rd largest oil/gas group in China• Exclusive rights: China’s offshore oil/gas exploration, development, production• Management strength
Nanhaisite model
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The CSPC Nanhai petrochemical project
$4.3 bln total investment 800,000 ton/yr ethylene production 2.3 mln ton/yr total production Primarily supplying domestic market Fully integrated complex World scale and world class technology
• 1.7 sq mile site
• 25,000 workers during peak construction
• 2.3 million tons of products per year
• Resettlement of 2,500 households
• Start-up Q3 2005
• Largest Sino-foreign joint venture
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What are the Sustainable Development issues?
Environmental and Social Impact Assessment
Environmental
Construction Operation
Social
Villager resettlement Livelihood restoration
Partnerships – JV parent companies, local government, contractors, communities, lenders, local and international expertise –Learning together
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Environmental: construction phase
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Construction phase
Coral relocation
Minimize run-off, sediment
Waste – reduce, re-use, recycle (7 recycling companies)
Contractor housing, health, social impacts
Noise impacts
Monitoring and Reporting – 40 environmental parameters
HSE standards – occupational health, lightning, heat, typhoons, driving
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Environmental: operation phase
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Operations phase
Effluent discharge
Energy Efficiency
Water conservation
Waste minimization
Air emissions
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Social: villager resettlement
From
To
From
To
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Resettlement – partnership
Two Villages – 2500 households – 8000 people
New village construction –schools, healthcare, etc
Compensation for lost income
Monitoring and reporting - transparency
Community Health Joint Steering Committee
Local price index
Rooftop Gardening program
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Social: livelihood restoration
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Livelihood Restoration – and more partnership
Commitment to local employment Training – skills, crafts, HSE, language Internships – Huizhou municipality Re-settled village contracting companies – small business support Supporting entrepreneurship Kedeng Fluorescent Light Fittings Factory Commercial building built by villagers Villagers developing industrial land
2004 Targets: Training – 1050 Employment – 70%
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Looking ahead ……..
Petrochemical Industrial Park Possible upstream and downstream investments Chinese Business Council for SD
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Want to know more?
For further information about Shell Chemicals please visit:
www.Shell.com/chemicals
For further information about the Nanhai joint venture please visit:
www.CNOOCShell.com