British oil and gas major Shell [SHEL:US], China’s state-owned refiner Sinopec [0386:HK], Chinese steel manufacturer Baowu [600019:CH], and German chemical giant BASF [BAS:GR] have signed a non-binding Memorandum of Understanding (MoU) to study the feasibility of building an open-source carbon capture, utilization, and storage (CCUS) project in the East China region, as reported by Reuters on November 4. Under the MoU, the four parties plan to launch a joint study to assess the technical solutions and develop a commercial model for the project. The study will also explore establishing high-integrity and verified low-carbon product supply chains and propose enabling policies. If successful, the project could capture tens of millions of tons of carbon dioxide (CO₂) per year, targeting not only emissions from the parties involved but also industries in the East China region.  

The project is intended to offer a flexible, efficient, and integrated decarbonization solution to industrial companies in the East China region. Carbon emissions collected from these enterprises will be shipped to a receiving terminal on CO₂ carrier ships, before being transported to onshore and offshore storage sites through short pipelines. Previously, Shell also inked an agreement with state-owned China National Offshore Oil Corporation (CNOOC) [0883:HK] and Exxon Mobil [XOM:US] to explore the feasibility of establishing a CCUS project at sea in China, which could capture 10m tons of CO₂ annually. According to Shell, developing CCUS projects in China accords with the firm’s ambition of having a CCUS capacity of at least 25m tons a year by 2035. 

Sources:

https://www.reuters.com/business/energy/shell-jointly-study-east-china-carbon-project-with-sinopec-baowu-basf-2022-11-04/

https://www.upstreamonline.com/energy-transition/shell-sinopec-to-explore-ccus-project-in-china/2-1-1346485

https://www.shell.com.cn/en_cn/media/media-releases/2022-media-releases/shell-sinopec-baosteel-and-basf-to-explore-open-source-carbon-capture-utilisation-and-storage-project-in-china.html

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