Texas-based oil and gas major Energy Transfer said the company has entered into a long-term agreement with Colorado-based CloudBurst Data Centers for the energy supply to serve a data center development in Texas.
The agreement announced Feb. 10 calls for Energy Transfer to provide as much as 450,000 MMBtu per day of natural gas to CloudBurst’s flagship Next-Gen Data Center campus near San Marcos. Energy Transfer on Monday said the natural gas supply “would be sufficient to generate up to approximately 1.2 GW of direct, or ‘behind-the-meter’ electric power for a period of at least 10 years,” beginning with the first phase of development for the data center.
CloudBurst, headquartered in Denver, said its expects a final investment decision for the project later this year. The company said it expects the facility would be operational in the second half of next year.
‘Very Excited’ About Deal
“We are very excited about our close relationship with Energy Transfer and feel extremely confident in their ability to provide redundancy through their vast pipeline network and storage capacity,” said Cynthia Thompson, executive chair for CloudBurst Data Centers. “In addition, we will work closely with Energy Transfer to identify additional potential data center sites, on or close to their strategic natural gas pipeline network, using our proprietary site selection software.”
The deal is Energy Transfer’s first commercial arrangement to supply natural gas directly to a data center. The company on Monday said it “is uniquely positioned to provide reliable natural gas supply that is crucial to the data center operations under development, many of which are in close proximity to [Energy Transfer’s] vast network of more than 105,000 miles of natural gas gathering, and intrastate and interstate transportation pipelines and storage facilities with a combined storage capacity of nearly 236 billion cubic feet.
Energy Transfer said it is in discussions with several data center developers, and said it expects this agreement will “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 nationwide footprint.
Rise in Demand for Natural Gas
Energy industry analysts have told POWER they expect demand for natural will rise to help serve the energy-intensive data center sector. Oil and gas major ExxonMobil in December of last year said it plans to build a large natural gas-fired power plant specifically to serve data centers. EQT Corp., a natural gas company operating in Ohio, Pennsylvania, and West Virginia, last fall said data center energy needs could boost U.S. natural gas demand by up to 10 billion cubic feet per day.
Yes Energy, a Colorado-based analytics firm, recently said more than 200 natural gas-fired power units are in various stages of development across the U.S., in part due to the expected demand from the artificial intelligence/data center sector. An executive with Canadian gas pipeline operator TC Energy last year said data centers would drive significant growth in demand for natural gas.
—Darrell Proctor is a senior editor for POWER.