China’s commitment to being a world-leader in clean energy adoption and the reduction of carbon emissions has taken a large step forward today with the announcement of a liquified natural gas (LNG) management solution, enabled by the VeChainThor Blockchain. The blockchain solution is the result of a new joint initiative between VeChain and two of China’s leading energy and gas companies.

Ontop of being one the largest LNG producers, China is currently the world’s second-largest importer of LNG. 2017 saw China’s use of LNG grow 50% in response to a government program to wean the world’s most populous nation off of coal and other carbon-rich fossil fuels. According to the International Energy Agency, China will surpass Japan by 2020 to be the world’s largest LNG importer. To meet this rapid increase in LNG imports, China has prioritized the construction of several new LNG industrial parks. One of these parks is the Zhoushan LNG Storage and Distribution Centre. This single facility can process 3 million tons of LNG a year.

The import, customs, tracking, transportation, and trading of such massive quantities of LNG must be handled with the utmost care in regards to safety, efficiency, and auditing. Blockchain and IoT technology have been proven to fulfill on these mission-critical aspects of the economy, hence the application of these technologies to the import of LNG. VeChain, the world’s leading enterprise IoT and blockchain provider, was chosen to participate in the development of a pilot LNG management solution in the Zhoushan LNG Storage and Distribution Centre. This historic innovation is being developed between VeChain and ENN Energy Holdings Limited, one of the largest-scale clean energy distributors in China, and Shanghai Gas, a state-owned company who has provided gas and lighting to Shanghai since 1865. This solution is the first of many to further control the safety, trade, and auditing of LNG related products and services across China.

The formal announcement of this new LNG initiative was announced at The China International Gas & Heating Technology and Equipment Exhibition 2018. VeChain representatives were in attendance at this event October 29th until the 31st. The exhibition is hosted by the China Gas Association and held at the Hangzhou International Expo Centre.

A Collaboration Between Leaders

In the introduced solution, ENN Energy Holdings Limited is responsible for the design and system construction of LNG-related business scenarios and is providing the necessary vehicles/equipment. In the pilot roll out of this solution, ENN Energy Holdings Limited will provide the onsite technical team and testing locations working within their existing businesses. As an extension of the pilot and surrounding tests, ENN Energy Holdings Limited also will be one of the operating parties in the commercial landing projects.

VeChain is responsible for providing blockchain core technology and the necessary software services.

Shanghai Gas is the overseeing party who ensures the solution expands across the national LNG market and has already connected a host of similar companies to the expansion of this solution. Their role within the solution is to provide policy guidance ensuring government mandates and related process management. Shanghai Gas will provide resource coordination and support for the development of LNG-related businesses within the commercial landing project to facilitate its national expansion.

Tank storage for LNG at Wuhaogou (五号沟), Shanghai, owned by Shanghai Gas (Group) Co., Ltd

About the LNG Blockchain Solution

The solution handles the quality assurance process including classification standards, weighing practices, and transportation process for the different types of natural gas. All information is certified by a third-party authority and uploaded to the VeChainThor Blockchain to establish credible industry standards per government mandates. From there, all aspects related to the data will be tracked, shared, and traded using the VeChainThor Blockchain which will be used for further auditing the LNG market.

The logistic processes stored on chain include:

All order information and associated tanker information

Logistics tanker IoT equipment information: GPS location information, acceleration information, pressure sensor information, driver driving information (whether the driver rests on time, driving habits, etc.)

Government mandated driver information: ID card, special vehicle driving license information, and outputs from the ENN face recognition system

An example being, LNG transported to Zhoushan Port from both overseas and domestic will be tagged into qualities of gas and be filled into different tanks. The gas quality information is uploaded on blockchain and associated with a tank number. When the trucks come to the Port, each truck has a unique ID, after LNG is filled into the truck, the weight information is now added, as well as check in/out time. Once these steps are completed the quality control staff uploads the related LNG quality reports and associate the data to the truck ID. Through this process, the data of the whole lifecycle of LNG from carrier to end users can be cross-validated and verified on blockchain fulfilling government mandates.

The online LNG trading exchange for this solution will use Greatgas.cn affiliated to ENN Energy Holdings Limited. Greatgas.cn is currently providing comprehensive LNG information, market trends, professional analysis reports, LNG trading, transportation, financial, online payment and settlement and other consultancy service.

VeChain is responsible for providing backend blockchain infrastructure technology for this exchange. The VeChainThor Blockchain will be used for process and procedures currently on the website including the storage of qualification certificates and SKU inspection reports.

Zhoushan LNG Storage and Distribution Centre will be the first to implement this solution during the pilot phase prior to a larger roll out.

As the first large-scale liquefied natural gas (LNG) storage and distribution centre approved by the National Energy Administration and invested, constructed and managed by private enterprises, ENN Zhoushan LNG station was successfully tested to enter the operation stage on October 19th, 2018. The Centre includes 3 docks, 2 all-inclusive LNG storage tanks, 14 tank truck loading rafts, high-pressure IFV gasification facilities, high-pressure external transmission, cold energy power generation and other supporting technologies and auxiliary facilities. The annual processing capacity of LNG at this plant is 3 million tons.

ENN Zhoushan LNG station

The expansion of the second phase of the Zhoushan LNG Storage and Distribution Centre has been submitted to the Zhejiang Provincial Energy Bureau for approval. The proposed investment is 2.2 billion yuan. It is expected to be completed in the first-half of 2021. The annual capacity for processing LNG will reach 5 million tons, and the long-term project will be upgraded to 10 million tons (roughly 25% of imported LNG).

About ENN Energy Holdings Limited

ENN Energy Holdings Limited (2688.HK), a flagship industry of ENN Group, has been engaged in the urban pipeline gas business from 1992. It is one of the largest-scale clean energy distributors in China. Through continuous strategic upgrading, it has formed four core businesses — natural gas sales, integrated energy service, energy trade, and energy transmission and distribution, committed to becoming an integrated energy service provider. By the end of 2017, the company has a total asset of 60 billion RMB and more than 400 wholly-owned and holding companies and branches, with more than 32,000 employees. They currently hold a market cap of $85Bn producing 56B HKD in 2017 revenue.

ENN provide clean energy products, service, plan and implement clean energy integrated solutions for:

17 provinces, municipalities and autonomous regions；

172 urban natural gas projects;

More than 16 million resident users;

More than 91,000 industrial and commercial users;

39,000+ kilometers middle-distance and main pipeline;

Cover more than 84 million urban population;

Investment and operation in 105 cities;

606 natural gas station;

Total assets of 60 billion RMB

About Shanghai Gas (Group) Co., Ltd

Since the official gas supply of the Shanghai Gas in 1865, the state-owned urban gas company has experienced more than 150 years of business. At present, Shanghai Gas (Group) Co., Ltd has achieved the goal management model of “multi-gas source, one network, and diversified sales” and a complete industrial system. As of 2017, the Shanghai Gas market share accounts for more than 90% of Shanghai’s total market, with an annual supply of more than 8.06 billion cubic meters.