UPDATE: IBM Signs Clean Energy Deal With China's ENN Group

International Business Machines Corp. (IBM) said Friday it has signed an agreement with Chinese gas-distribution and energy company ENN Group to help Chinese companies and cities become more energy efficient.

IBM will provide consulting and information technology services to ENN Group to help it become "a total clean energy solution and services provider," the two companies said in a statement.

"The two companies will explore innovative business models for energy services and help Chinese companies and cities develop a low-carbon economy," the statement said.

The two companies said they will work together on IBM's "smart cities" initiative in China, under which IBM uses information technology and data analysis to make public services, in this case energy production and distribution, more efficient.

In September, IBM launched its first full-scale smart city project in the northeastern Chinese city of Shenyang, to help the city improve everything from water treatment to traffic management.

ENN, based in the northern Chinese province of Hebei, operates natural gas, biofuels and thin-film solar panel manufacturing businesses. It is the parent company of Hong Kong-listed XinAo Gas Holdings Ltd. (2688.HK), a piped-gas distributor.

IBM's announcement follows news last month that Duke Energy Corp. signed an agreement with ENN to help it develop and operate solar-power projects in the U.S.

The companies will focus on developing large-scale solar farms to serve utilities, as well as smaller commercial rooftop solar systems, according to Duke.

IBM's statement didn't include any financial information on the agreement, but D.C. Chien, chairman and CEO of IBM's Greater China Group, said in the statement the deal with ENN is "IBM's biggest and most influential strategic collaboration in China over the past decade."

-By Aaron Back, Dow Jones Newswires; (8610) 6588-5848; [e-mail]