Shanghai Gas, a subsidiary of the Shenergy Group Company Limited, will work with VeChain to launch an energy project enabled by blockchain.
The announcement came on Tuesday in VeChain’s blog post. Shanghai Gas has been in charge of the pilot project for liquefied natural gas (LNG) management solution since 2018. The Zhoushan LNG Storage and Distribution Centre, co-convened by VeChain and ENN Energy Holdings Limited, houses the facility.
Shanghai Gas is looking at investing now that blockchain has reduced the complexity and cost of transactions. Thus their collaboration with VeChain aims at lesser operational outlay, efficiency improvement of the supply chain, and business process optimization. Further, the partnership targets to build a trust-free “Energy-as-a-Service” ecosystem.
Natural gas in China
In 2019, in its World Energy Outlook report, the International Energy Agency (IEA), named China as the next leading force in natural gas. Notably, this report placed the Chinese domestic LNG market at the forefront of the gas sector.
Besides, due to its cost-effective, clean and eco-friendly nature, natural gas commands a very essential role in the energy market.
However, several difficulties had cropped up due to a lapse in the sharing of information between stakeholders in the industry. Such issues include the deregulation of price control, partial access for third-party involvement, and the partition of sales channels from energy infrastructure.
Thus the situation calls for a durable solution to tackle the issues associated with security, price control, transaction processes, supply and demand imbalance, etc. In this backdrop, the fusion of blockchain technology into the gas sector has emerged as a viable solution.
Fusion of natural gas and blockchain
Shanghai Gas, with a registered capital of RMB 4.2 billion, occupies over 90% of the Shanghai energy market. It is also making giant strides in technological reformation through the blockchain industry.
To point out, its collaboration with VeChain had been going on since 2018. However, the latest foray together is set to implement the blockchain-based energy plan that they had started working on.
As the project kicks off, the first stage, according to the VeChain blog post, involves “the LNG delivery information and the component information of the storage tank, which shows the quality of LNG will be collected and uploaded onto the VeChainThor blockchain by leveraging the one-stop BaaS Data Platform — VeChain ToolChainTM.”
With the above process in place, there will be fewer information barriers in the supply chain. This, in turn, is likely to enhance the transparency of production processes. And all this will result in creating a reliable database for risk management in the gas sector.
Incidentally, VeChain utilizing its blockchain expertise to work with the Chinese industry is nothing new. Last year, it had partnered the Anhui Tea Industry Association to use its VeChainThor technology to boost the sector’s tea industry.
The integration of technology such as cloud and blockchain-based services into various sectors is also as a result of the global outbreak of the COVID-19 pandemic. The crisis that has caused many enterprises to operate remotely thus enables new blockchain applications to make a mark.