Exxon Mobil [XOM:US], Shell [SHEL:LN], and China’s third-largest national oil company China National Offshore Oil Corporation (CNOOC) [0883:HK] have signed a memorandum of understanding (MoU) to study the feasibility of establishing a world-class carbon capture, utilization, and storage (CCUS) project in China, as reported by Bloomberg on June 29. The proposed project would capture carbon emissions from the Dayawan Petrochemical Industrial Park in Huizhou, Guangdong Province for storage in the ocean. According to CNOOC, the project will be China’s first CCUS project to have a carbon capture capacity of 10m tons annually, roughly equivalent to 0.1% of the country’s total annual carbon emissions.

The gigantic CCUS project will make the Dayawan Petrochemical Industrial Park one of the first demonstrative petrochemical projects to be decarbonized, according to Exxon Mobil. Shell and CNOOC jointly operate a petrochemical plant in the industrial park, while Exxon Mobil had announced plans last November to build a USD10bn chemical complex in the district. Participation in the research of CCUS technologies could pave way for the refining and the petrochemical industries’ net-zero transition, remarked CNOOC Chairman, Wang Dongjin. Nevertheless, China’s development of CCUS technologies is still at an early stage. By September 2021, China only had 23 CCUS projects in operation with a combined capturing capacity of 4m tons a year. In January 2022, state-owned oil group Sinopec [0386:HK] delivered a CCUS project in Shandong Province, which is the largest in China so far with a capture capacity of 1m tons a year.

Sources:

https://www.bloomberg.com/news/articles/2022-06-29/oil-giants-partner-on-massive-carbon-capture-project-in-china#xj4y7vzkg

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/062822-exxonmobil-shell-cnooc-to-pursue-offshore-carbon-capture-hub-in-china

https://finance.sina.com.cn/money/future/roll/2022-06-28/doc-imizirav0992107.shtml?finpagefr=p_115

https://www.shell.com/business-customers/chemicals/media-releases/2021-media-releases/chinese-industry-to-benefit-as-cnooc-and-shell-start-up-new-petrochemicals-units.html

https://corporate.exxonmobil.com/News/Newsroom/News-releases/2021/1108_ExxonMobil-to-invest-in-petrochemical-complex-in-China