Energy Transfer Strikes 450 BBtu/d Deal with Cloudburst

Can Gas Producers Tap into the Data Center Boom?

Energy Transfer LP entered into a long-term agreement with Cloudburst Data Centers to supply 450 BBtu/d of firm natural gas supply (~1.2GW). How can gas producers get a share of the economics from supplying gas to power data centers?

𝙒𝙝𝙮 𝙞𝙩 𝙢𝙖𝙩𝙩𝙚𝙧𝙨? Data center customer demand for highly reliable power is attracting deals for gas-fired generation. However, gas-fired reliability depends on the reliable availability of gas at the facility. This deal is about ensuring gas availability - the tenure of this deal is “for a period of at least 10 years” - and Energy Transfer is likely to be well compensated for providing that certainty.

Recent announcements from Exxon and Chevron provide examples of gas producers delivering gas and power to data center customers. However, these plans include delivering gas and producing power.

What about pure gas producers who develop the gas resource Energy Transfer depends on? Will they capture some of the economics in this deal?

What examples have you seen of announcements that include pure gas producers and midstreamers teaming up to meet data center demand?

𝘿𝙚𝙩𝙖𝙞𝙡𝙨:

•   The CloudBurst facility is located in San Marcos, TX and is expected to to reach FID later this year and be operational in Q3 of 2026.

• The press release also notes that “… Energy Transfer 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…”