AFTER decades of relying on bicycles, the Chinese are pedalling towards a more motorised economy as Dutch oil giant Shell leaps from Hong Kong into the growing petroleum market. The multi-billion international company, established in Hong Kong in 1914, has already drawn up plans to build China's largest crude oil refinery in Nan Hai, Guangdong province. ''When it is built, the refinery will process eight million tonnes of crude oil a year and will have a capital cost of more than US$5 billion,'' said Jamie Walls, the company's corporate affairs manager in China and Hong Kong. ''It will be one of Shell's largest projects and will provide a whole range of oil products, including detergents, lubricants and plastics that Shell will be able to market inside China. ''But we are also aiming at expanding into the retail market and to open up more service stations,'' said Mr Walls, adding that Shell already sold bitumen, liquid petroleum (LP) gas and chemicals to the Chinese. Before the company started moving operations into the Chinese market, it merged its Hong Kong and China offices in 1988 to avoid any lap-over of interests. It also established bases in Shanghai, Guangzhou and Beijing. ''Like many companies, we've used our base in Hong Kong to springboard into China - a market that we expect will have a large demand for oil and petrol products in the future,'' said Mr Walls, who has been head of public affairs in China and Hong Kong fo ''Over the last 10 years, we have set up operations in Beijing, Shanghai and Guangzhou so we can carry out exploratory projects looking for oil and gas. ''Currently, we are negotiating over the Nan Hai refinery project, which will be a great step for Shell - but will also introduce technological advances to China.'' Shell, set to launch its first major marketing campaign in China this week, hopes to cash in on its 100-year association with the country to make it one of its biggest markets. Another ambitious project that is still under negotiation, is building a $500-million terminal at Daya Bay, Guangdong, to receive ships containing cargoes of liquified gas. ''At the terminal, the liquid would be converted back into gas which would then be used as fuel for a gas-driven power station,'' said Mr Walls. ''Shell would not run the power station, it would be managed by a Chinese company. ''Shell does not manufacture any products in China at the moment, but that's why it is important for the company to have a base in Hong Kong. ''Although the long-term plan for China is to make Shell China a Chinese company, we are lucky to have an established base in Hong Kong, which we have used as a stepping stone.'' Building storage terminals near Shanghai and Beijing is also of major priority for the oil company, which is 60 per cent Dutch-owned and 40 per cent British. ''Shell has two storage terminals and eight service stations in Guangdong and a lubricant oil plant, which processes oil products to make lubricants, is also planned for Shanghai,'' said Mr Walls. While much of the technology Shell hoped to take to China was ''state of the art'', many projects had been ''tried and tested'' in Hong Kong, he said. ''We've been in Hong Kong for 80 years and started when the oil and kerosene trade first got off the ground here,'' said Mr Walls. ''Now, we are the biggest oil retailing company in Hong Kong and have 58 service stations throughout the territory and some in Macau. ''The retail service is our major 'flagship' in Hong Kong and we are hoping to open more stations and improve our existing ones.'' While the company makes millions of dollars each year selling petrol products, Shell also does its share to protect nature and has launched a number of ''green'' campaigns. ''In November, we opened the New Territories first environmentally friendly service station. ''It has been fitted out with a special drainage system so any fuel or residue spilled on the concrete can be separated from excess water.''
