More multinational energy giants are announcing their plans to invest in China’s energy sector as a result of the industry’s rapid growth in recent years.
The investments include a wide range of sub-sectors such as petrochemicals, hydrogen, vehicle charging stations and carbon capture, utilization and storage (CCUS).
London-based global energy and chemical group INEOS announced it planned to set up a joint venture with China Petrochemical Corp in Tianjin to make high-density polyethylene.
The joint venture, with registered capital of about 623 million yuan ($92.1 million), is expected to boost China’s high-end petrochemical sector to meet growing demand.
On the other hand, the British energy giant BP plc (formerly British Petroleum) signed a contract with China Suntien Green Energy Corp to establish a trading company to help supply liquefied natural gas (LNG) in northern China.
This is especially important as LNG imports are becoming a key factor in meeting the country’s growing demand for gas, helping it move towards zero emissions targets set by the XIV Five-Year Plan.
China overtook Japan as the world’s largest importer of liquefied natural gas, accounting for about 60% of global LNG demand growth in 2021.
London-based multinational Shell has also invested more in China’s renewables in recent years.
It has said it will expand its hydrogen footprint in the country by building a network of hydrogen refueling stations in Shanghai, Shell’s first hydrogen refueling network in Asia, in cooperation with state-owned Shenergy Group, based in Shanghai. Shanghai.
The joint venture plans to build six to 10 hydrogen fueling stations in Shanghai and the Yangtze River Delta region in the next five years, reaching 30 stations by 2030.
Thirty stations could supply hydrogen to around 3,000 fuel cell trucks or buses a day.
The refueling network would help accelerate the adoption of fuel cell vehicles in road freight transport, public transport, municipal services and ports in Shanghai and the Yangtze River Delta region.
CCUS projects
China has more than 40 CCUS pilot projects with a total capacity of 3 million tons.
Many of them are small projects related to enhanced oil recovery that should grow considerably in size in the next four decades.
Shell officials also expressed optimism about the prospects for CCUS in China, calling it essential to help China reach peak carbon in 2030 and carbon neutrality in 2060.
The country’s significant geological potential for carbon storage – there is an estimated 2,400 gigatons of storage capacity, second only to that of the United States – leaves plenty of room to tap, said Jason Wong, CEO of Shell Companies in China.
China promotes the renewable energy sector
In July, Shell announced plans to join state-owned oil and gas giant China National Offshore Oil Corp and the Guangdong Provincial Development and Reform Commission to build China’s first large-scale capture and storage facility in Guangdong province. Guangdong.
The center is expected to capture up to 10 million tons of carbon dioxide per year, which will help significantly reduce carbon dioxide emissions and meet the decarbonization needs of businesses in the area.
The growing cooperation between energy multinationals and local players in the energy sector in China has not only helped to secure the Asian country’s energy supply, but has also helped ensure the stability of the supply chain. industry and energy supply worldwide.
The expectations of the Chinese government
China has great market potential, China’s growing energy demand and its ecological transition away from fossil fuels with cleaner ones are offering new opportunities to foreign energy players, and as the green energy transition continues to accelerate with the goal of being carbon neutral, the Chinese government expects foreign investment in the energy sector to increase.
Xi Jinping’s government has recently approved a plan to launch employment programs in exchange for subsidies with a key focus on fields such as energy, especially electricity, oil and gas pipelines and renewable energies, which will offer numerous opportunities. to multinational companies seeking more opportunities to expand in the generation of renewable energy in the Asian giant.
According to a report published by the Paris-based International Energy Agency, China was the largest investor in clean energy last year, followed by the European Union and the United States.
China spent $380 billion on clean energy last year, far ahead of the EU’s $260 billion and the United States’ $215 billion.
In addition, approximately 80% of electric vehicle sales are made in China and Europe, while 90% of infrastructure spending for electric vehicles is made in China, Europe and the US, according to the report.
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