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Royal Dutch Shell signs MoU with China's CNOOC to build 260,000 T polycarbonate plant

FILE PHOTO: A guard stands outside Anglo-Dutch oil major Royal Dutch Shell's first gas station in Mexico City

BEIJING/GUANGZHOU (Reuters) - Royal Dutch Shell <RDSa.L> signed a memorandum of understanding (MoU) with China National Offshore Oil Corp (CNOOC) to build its first commercial-scale polycarbonate production plant in the southern Chinese city of Huizhou.

Polycarbonate is a transparent and impact-resistant polymer, widely used to make vehicle headlights and LED spotlights.

"(Huizhou city government) is in touch with Shell and CNOOC for detailed investment and production plans," said Liu Ji, mayor of Huizhou, on the sideline of a conference in Guangzhou on Thursday.

The production capacity of the polycarbonate plant is planned to be 260,000 tonnes per annum, Shell said in an email on Friday.

The MoU follows an agreement reached by the two energy giants in October 2018 that aims to build more production equipment at their jointly-owned petrochemical complex in Huizhou.

CNOOC and Shell Petrochemicals Corp (CSPC) has ethylene production capacity of 2.2 million tonnes.

Meanwhile, Shell has started constructing a polycarbonate development unit at its Jurong Island chemicals plant in Singapore as an interim step, the company said in a statement on Monday.

"(...)We have an advantaged route to production and are looking at investment in a number of commercial-scale units to serve the growing number of polycarbonate customers," Thomas Casparie, Executive Vice President of Shell's global chemicals business, said in the statement.

The Huizhou mayor also said the city was in talks to introduce a fine chemical project with a "world-leading" company into the city, without giving more details.

(Reporting by Muyu Xu in BEIJING and David Kirton in GUANGZHOU; Editing by Alex Richardson)