Shell-CNOOC China JV to close 1.2-MMtpy steam cracker due to feedstock disruption
Shell's south China-based petrochemical complex, a joint venture with China's CNOOC, plans to shut a steam cracker soon and has told domestic customers it is unable to supply some products.
CNOOC and Shell Petrochemicals Company Limited, or CSPC, plans to close a 1.2 million metric ton-per-year (tpy) cracker situated in Huizhou city of Guangdong province, one of its two crackers with total capacity of 2.2 million tpy, due to disruptions in feedstock supplies, the sources said.
In a notice to a local customer seen by Reuters, CSPC said supplies of polyethylene will be suspended for an unspecified period from March 5 due to "facility shutdown", citing the Middle East conflict and feedstock supplies.
CSPC sources some of its feedstock, naphtha, from the Middle East via spot tenders, the sources said, without specifying details.
One other reason for the shutdown is the venture had been incurring losses due to heavy reliance on naphtha as the feedstock, versus rival producers that are more flexible and can shift to higher usage of cheaper feedstock such as LPG, one of the persons said.
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