Firm Advises Shell on World Scale Petrochemical Joint Venture Project with CNOOC in China

20 Dec 2016

International law firm Simmons & Simmons has worked with the Legal team of Shell International Limited (“Shell”) on a world scale petrochemical joint venture project with China National Offshore Oil Corporation (“CNOOC”) in Huizhou, southern China.

The Huizhou Phase 2 Petrochemical Project (“Project”) will be owned by CNOOC and Shell Petrochemicals Company Limited (“CSPC”), an existing 50:50 joint venture between Shell and CNOOC. On 2 November 2016, Shell and CNOOC jointly announced that the Project has received all necessary government and regulatory approvals and CSPC has officially assumed ownership of the Project.

CSPC assumed ownership of the petrochemical project which is under development by CNOOC. The new project consists of a new ethylene cracker and several ethylene derivative units adjacent to CSPC’s existing Nanhai petrochemical project in the Daya Bay Economic and Technological Development Zone. It will also include the construction of what will be China’s largest styrene monomer and propylene oxide (“SMPO”) plant. It will be the first time Shell’s industry-leading OMEGA and advanced polyols technologies are applied in China. CSPC’s ethylene production capacity will be increased by over 1 million tonnes per year.

Team leader, partner Eric Lin said: "This was an exciting and challenging project requiring knowledge of petrochemical and joint venture projects in China and real team work. Our Simmons & Simmons team worked very closely with the Legal team in Shell and seconded some of our colleagues into the Shell project team. Through the leadership of the Shell Legal team and our partnership, we are proud that we can fully integrate our team with the legal and business teams of our client so as to deliver real seamless services.”

Over the past two years, the Simmons & Simmons China team led by Beijing-based partner Eric Lin has worked with the Shell Legal team, advising on all Chinese law aspects of this landmark transaction. Eric is assisted by corporate partner Vivien Yang (Hong Kong) and employment partner Lesli Ligoner (Shanghai) for employment and compliance advice. Other core team members include Moven Liu (Hong Kong), Melody Yang (Beijing), Xun Yang (Shanghai), Shirley Zhao (Hong Kong) and Vera Zuo (Beijing). 

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