Shell has made a final investment decision on expanding a petrochemical plant with a Chinese firm.

The oil giant and China National Offshore Oil Corporation (CNOOC) have confirmed plans to extend their petrochemical joint venture site in Guangdong.

The project includes the ongoing construction of additional chemical facilities next to the current facility, which will increase ethylene capacity by more than one million tonnes per year.

Ethylene is a basic chemical widely used in the production of everyday items such as plastic bags, washing up liquids, paints and car components. The plant’s feedstock is ethane which arrives after a series of oil and gas processes.

Graham van’t Hoff, Executive Vice President for Royal Dutch Shell global Chemicals business said: “We are selective in our investments and this decision underlines our confidence in the strong growth potential for chemicals in China. It will position Shell and our partner CNOOC well to help meet the growing needs of customers in this expanding petrochemicals market.”