IBM Aims to Dominate LNG IT Infrastructure in China with Landmark Dapeng Terminal Project

China's pursuit of liquefied natural gas (LNG) security has led IBM to capitalize on the opportunity by participating in the design and delivery of the Dapeng LNG terminal's information technology infrastructure. The $898 million project, which began operations last month, marks a significant milestone for IBM in China's energy sector. With a 25-year contract valued at $25 billion secured in 2002, China aims to meet 39% of its gas needs through LNG imports by 2020.

Key Takeaways:

• IBM played a crucial role in designing and delivering the business processes and related hi-tech systems for the Dapeng LNG terminal, a $898 million project that has commenced operations.
• The terminal is expected to be the first of many mainland regassification plants running on gas from Australia's North West Shelf, with a 25-year, $25 billion contract signed in 2002.
• The Dapeng LNG terminal is responsible for importing, storing, regassifying, and transmitting LNG for Shenzhen, Dongguan, Guangzhou, Foshan, and Hong Kong, and has 11 shareholders, including China National Offshore Oil Corp (33%) and BP (30%).
• IBM's engagement with DPLNG involved a three-phased approach in designing processes for integrating corporate applications and rolling out SAP's enterprise resource planning (ERP) system.
• The company has established itself as the leading ERP services provider for major power-generation companies in China, with clients including China Huadian, Guangdong Power Development, Dachaoshan, Xiexing, and Dongnan Power.
• China's natural gas demand is projected to grow 12% annually over the next 15 years, with the country expected to meet 39% of its gas needs with LNG imports by 2020.

Statistics:

• The Dapeng LNG terminal project has a contract value of $898 million.
• China has signed a 25-year, $25 billion contract with Australian gas companies for LNG imports.
• The Dapeng terminal is expected to import 60,000 tonnes of gas from Australia's North West Shelf per shipment.
• China's natural gas demand is projected to grow 12% annually for the next 15 years.
• By 2020, China expects to meet 39% of its gas needs with LNG imports by tanker.
• China's gas needs will be met 10% with gas piped in from Russia and Central Asia by 2020.

Sources:

• "IBM aims to corner market for LNG IT infrastructure in China" (article), uncredited, June 14, 2007 (newspaper clipping).
• "China's LNG demand set to soar" (article), National Development and Reform Commission, 2002 (government report).
• "Dapeng LNG terminal begins operations" (article), uncredited, May 2007 (newspaper clipping).
• "IBM Global Business Services in Greater China" (company website), IBM Corporation.