Royal Dutch Shell Plc said it would further cooperate with China National Offshore Oil Corp to better serve the growing number of intermediate and performance chemicals customers in the key market of China.

CNOOC Oil & Petrochemicals Co. Ltd (CNOOC), Shell Nanhai B.V (Shell) and the Huizhou government announced on Sunday a strategic cooperation agreement to further expand the CNOOC and Shell Petrochemical Company (CSPC) 50:50 joint venture in Huizhou, Guangdong province. The expansion is expected to supply products including SMPO, polyols, ethylene glycol, polyethylene and polypropylene.

"Our growth strategy is based on long-term chemicals demand," said Thomas Casparie, executive vice president for Shell's global chemicals business.

"We are very selective in our investments, and this agreement underlines Shell's confidence in both the chemicals business fundamentals and our strategic partnerships with CNOOC and the Huizhou government."

These chemicals are used in a wide range of end products across industries, in healthcare, construction, fabrics, packaging, transport and electronics.

For the first time in Asia, Shell will apply its advanced technology for linear alpha olefins, it said.

The project is intended to include construction of a new ethylene cracker with a 1.5 million ton annual capacity, and the mega-site is expected to bring economies of scale and enhanced competitiveness.