Shell setto sign $4.3bn China deal

Royal Dutch Shell, the oil and gas giant, moved closer yesterday to sealing a deal to expand its presence in China with a $4.3bn (£2.9bn) joint-venture petrochemical plant.

Royal Dutch Shell, the oil and gas giant, moved closer yesterday to sealing a deal to expand its presence in China with a $4.3bn (£2.9bn) joint-venture petrochemical plant.

The project would be one of the largest foreign investments in the world's most populous country and comes after more than 12 years of negotiation.

A Shell official in London said: " We have indeed reached agreement on the outstanding issues and hope to sign a joint-venture agreement around the end of October."

Shell is set to agree the 50:50 joint venture to build the plant in Huizhou, Guangdong, with a consortium headed by the China National Offshore Oil Corporation (CNOOC), the country's monopoly offshore oil producer. The complex's centrepiece will be an 800,000 tonne per year ethylene facility. Ethylene, a raw material derived from natural gas, is used in a variety of industrial processes. The plant should be operational by 2005.

In China, Shell appears poised to commit about $1bn to global share offerings in CNOOC and China Petrochemical Corp (Sinopec), the country's second-largest state oil company.

The CNOOC offering is due to come to market early next year, while Sinopec shares could be traded from next month, reports have suggested.