Energy Transfer signs deal to provide natural gas to proposed data center in Texas
Energy Transfer LP has entered into a long-term agreement with CloudBurst Data Centers Inc., Denver, to provide natural gas to CloudBurst’s flagship AI-focused data center development in Texas.
Through the deal, Energy Transfer’s Oasis Pipeline LP would provide up to 450,000 MMbtu/d of firm natural gas supply to the data center campus near San Marcos, Tex., subject to CloudBurst reaching a final investment decision (FID) with its unnamed customer.
CloudBurst expects power for the data center to be generated on-site "from a combination of transition fuels, green energy (roof solar), or renewables," according to its website.
The natural gas supply would be sufficient to generate up to about 1.2 Gw of direct (behind-the-meter) electric power for a period of at least 10 years starting with Phase 1 of the data center facilities, Energy Transfer said in a release Feb. 10.
CloudBurst expects to reach FID later this year. On that timeline, the data center could be operational in third-quarter 2026.
Energy Transfer said this is its first commercial arrangement to supply natural gas directly to a data center, but that it is in discussions with “a number of data center developers and expects this to be the first of many agreements to supply, store, and transport natural gas to fuel data centers, electric generation facilities, and other power demand customers throughout its nation-wide footprint.”
The agreement follows recent deals signed by oil and gas companies ExxonMobil and Chevron in recent months to provide direct natural gas supply to data centers as demand for electricity is expected to grow rapidly.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.
