New natural gas demand is coming into focus to feed AI and data centers, and the Permian Basin looks to play a leading role. East Daley Analytics sees a potential connection between the Stargate Project, the OpenAI infrastructure project recently rolled out with much fanfare, a new Chevron power initiative, and Energy Transfer’s (ET) latest pipeline project.
EDA tracks data center projects in Texas and across the US in the new Data Center Demand Monitor. Many are on our radar. For example, Chevron (CVX) on Jan. 28 announced a partnership with Engine No. 1, and GE Vernova to build up to 4 GW of scalable gas-fired generation to power AI. The group plans to build co-located power plants at data centers and target customers in the Southeast, Midwest and West regions.
This follows President Trump’s announcement of the $500B Stargate Project to build AI infrastructure across the US, starting with a massive 5 GW project near Abilene, TX. The partnership with tech companies OpenAI, SoftBank and Oracle plans to invest $100B immediately, including its ‘flagship’ project in Abilene to feed new data centers, an OpenAI executive told Reuters.
The new Data Center Demand Monitor reveals a new infrastructure corridor emerging from West Texas to feed AI-driven energy demand (see figure). Energy Transfer’s (ET) Hugh Brinson Pipeline (formerly the Warrior Pipeline) will travel near Abilene, and we speculate that the new 1.5 Bcf/d project will help meet this emerging demand center. ET announced a final decision on the Hugh Brinson project in Dec ’24.
Chevron’s power plants, expected to be operational by 2027, will use GE Vernova 7HA natural gas turbines, the same turbine model confirmed for Stargate’s first onsite power plant. Site selections have not been announced, but the shared technology and regional alignment point to a connection between the CVX venture and Stargate.
Stargate’s Abilene data center project is expected to scale from 1.2 GW to 5 GW, making it one of the largest power-intensive AI clusters in the world. Developers have already submitted permits for a 360 MW natural gas power plant, reinforcing the trend of co-locating dedicated energy infrastructure with AI demand. At full scale, Stargate’s 5 GW demand could consume ~0.66 Bcf/d of natural gas (assuming 100% gas-fired power).
Available in Energy Data Studio, the Data Center Demand Monitor gives a bottoms-up approach to quantifying natural gas demand for data centers. East Daley tracks and maps nearly 300 projects by county across the US to visualize where demand could materialize. The new data center tool is available now as part of the Macro Supply & Demand package - reach out to learn more. - Ethan Warrick Tickers: CVX, ET.
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