Shell to invest $500 mln in China in 2006

BEIJING, March 8 (Xinhuanet) -- Royal Dutch Shell Group will invest 500 million U.S.dollars in China in 2006 in order to expandgas station network and develop clean energy in the country.

"Shell's investment of 3.5 billion dollars in China is too little, while the investment opportunities in the country are so big," said Lim Haw Kuang, executive chairman of Shell companies inChina.

Shell will seek all possible opportunities to expand investment in China to achieve mutual benefits for both sides, he said.

So far, Shell is one of the largest foreign-funded enterprises in the nation. It has set up 200 gas stations in East China's Jiangsu Province in cooperation with China Petroleum and Chemical Corporation (Sinopec), the nation's biggest oil refiner.

It also has 70 gas stations of its own brand in Guangdong, Beijing and Tianjin.

Shell's lower stream business in China witnessed fast growth. The Nanhai Petrochemical project in South China's Hainan Province,which is jointly funded by Shell and China National Offshore Oil Corp. is now operating.

The project is so far the largest Shell investment project in the petrochemical sector and is also one of the biggest foreign-invested enterprises in China.

Nanhai Petrochemical has an annual output capacity of 2.3 million tons of petrochemical products, which will help ease China's short supply of such products due to the fast development of the economy in the past years.

Meanwhile, Shell is focusing on developing an oil and coal transformation production project and signed last week a memorandum of understanding with Ningxia Hui Autonomous Region in northwest China in this regard.

It is also negotiating with China's biggest coal producer Shenhua on such a project.

In the upper stream, the Shangbei project jointly funded by Shell and the China National Petroleum Corp is expected to start supplying natural gas to Beijing and north China in 2008.