US energy infrastructure company Energy Transfer has reached a long-term agreement to supply natural gas to an artificial intelligence data center in central Texas.
Under that agreement — Energy Transfer's first direct supply contract with a data center — the company will provide about 450mn cf/d (13mn m³/d) to Denver, Colorado-based CloudBurst Data Center's planned data center campus near San Marcos, Texas, for at least 10 years.
That deal is contingent on CloudBurst reaching a final investment decision, which is expected later this year. The data center is scheduled to begin operations in the third quarter of 2026, Energy Transfer said.
New energy-intensive data centers that run artificial intelligence software will be a key source of power demand growth in the coming years. Data centers were forecast to drive power demand in the commercial sector 2pc higher this year and lead to another 2pc increase in 2026, according to the US Energy Information Administration.
Those additional power needs could lift gas demand by 3 Bcf/d or more by the end of this decade, according to some analyst estimates.
Energy Transfer will provide the gas via the Oasis pipeline, a 1.2 Bcf/d line that connects gas supplies from the Permian basin of west Texas to demand centers on the Texas coast. That supply will be used to generate 1.2GW of power exclusively for the data center.
Energy Transfer is in talks to supply other data centers along its network of natural gas pipelines. It expects the CloudBurst agreement to be "the first of many," the company said.
