Pipeline operators have advanced several deals recently to supply natural gas to data centers planned in Texas. The commercial momentum is good news for the state’s gas industry and moves the hype behind data centers closer to reality.
New Era Helium (NEHC) is negotiating a gas supply contract to fuel a 250 MW data center under development in Ector County, TX. The producer signed a letter of intent with Sharon AI to form a joint venture, Texas Critical Data Centers (TCDC), to develop the data center campus on 200 acres outside Odessa, the company said February 27. The site is near key infrastructure, NEHC said, including fiber optic cable, two gas transmission lines and CO₂ infrastructure.
NEHC intends to supply gas to the data center from its 20 MMcf/d processing plant in the Pecos Slope field in southeastern New Mexico. The north mainline of Kinder Morgan’s (KMI) El Paso Natural Gas system runs near the plant and could be an option to move gas. NEHC expects to finalize a gas supply contract with TCDC in 2Q25 and bring the first project phase online in late 2026.
Earlier in February, Energy Transfer (ET) announced a 450 MMcf/d contract with CloudBurst Data Centers to supply a data center planned outside Austin. ET’s Oasis Pipeline will deliver the gas for a 1.2 GW generation facility to power the data center campus near San Marcos, TX. The contract is contingent on a final investment decision (FID) by Denver-based CloudBurst, with operations expected to start in 3Q26.
East Daley Analytics tracks these and nearly 300 other US data center projects in the new Data Center Demand Monitor. Texas is a hotbed of development, as confirmed by these latest announcements. The Stargate Project is building a massive 5 GW project near Abilene, TX, and ET has cited market-pool demand (utilities, data centers) for helping bring its 1.5 Bcf/d Hugh Brinson Pipeline to an FID.
Users can track data center projects and their potential demand in EDA’s Data Center Demand Monitor, available as part of the Macro Supply & Demand package. The image above is from the dashboard and shows data center proposals by county in West Texas and related gas pipeline infrastructure. We currently forecast up to 6.1 Bcf/d of new gas demand by 2030 from AI-related power projects in our reference case. – Ethan Warrick Tickers: ET, KMI, NEHC.
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