Energy Transfer (ET) is riding the wave of data center development in Texas. The company on Oct. 9 signed an agreement with Fermi America to supply gas to the HyperGrid project in Amarillo, TX.
The 11 GW HyperGrid project is one of the largest data center campuses planned in the US. Spanning 18 million square feet across 5,200 acres, it is a first-of-its-kind, behind-the-meter energy complex that will combine on-site natural gas, nuclear, solar and wind generation to power hyperscale AI computing. The project is designed to operate independently of the grid, and positions Amarillo at the center of a convergence between energy infrastructure and the data center boom.
The supply agreement will connect Fermi’s campus to ET’s intrastate system just south of the campus, securing natural gas feedstock for 2 GW of on-site generation (see map above from East Daley Analytics’ Data Center Demand Tracker). The interconnection, expected online by 1Q26, can source supply directly from ET’s Permian Basin assets, creating a direct link from upstream molecules to downstream AI power. The site is also close to the Anadarko Basin, where ET owns several G&P systems.
The HyperGrid project will require a new lateral but no major new long-haul infrastructure. The new supply tie-in will enable Fermi to begin delivering power well ahead of its longer-term rollout of nuclear generation.
The agreement with Fermi is part of an emerging trend that is changing how pipeline projects are commercialized in Texas, particularly out of the Permian. Historically, producers have bankrolled new gas pipelines as part of a ‘supply-push’ strategy to enable more oil development in the basin. New data center projects, along with population and economic growth in Texas, is creating a parallel demand pull from downstream customers seeking to secure firm supply.
Energy Transfer’s Hugh Brinson Pipeline reflects this new dynamic. ET in December 2024 reached a final investment decision on the $2.7B project from the Permian through the Dallas/Fort Worth area. Along with the usual suspects from the Permian upstream, executives cited strong contracting from demand-side customers like utilities and data centers for helping pull the project across the finish line.
Since then, ET has continued to align its projects with downstream market growth. New expansions such as Desert Southwest reinforce a clear pivot from supply push to demand pull, with infrastructure increasingly driven by end-users rather than producers alone. The Fermi agreement continues this trend. ET is well positioned to capture the next wave of downstream natural gas demand from data centers, power plants and industrial customers that are shaping Texas’s energy future. – Kritika Gaikwad Tickers: ET.
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