Data center service provider Shanghai AtHub has received a letter of intent from Alibaba for a data center project in China, according to a notice filed to the Shanghai Stock Exchange on Monday.

The Shanghai-based company will charge service fees of around 2.44 billion yuan ($347 million) under the proposed 10-year contract with the e-commerce giant, which demanded that the data center project should be completed within 18 months, the notice said.

A formal cooperation agreement is likely to be signed after the completion of a feasibility study which is still underway, said Shanghai AtHub, which already maintains a regular partnership with Alibaba.

The deal, if finalized, should enhance Alibaba’s cloud computing capabilities.

Shanghai AtHub’s shares jumped by the daily 10% limit in Tuesday trade.

Contact reporter Ding Yi (yiding@caixin.com)