Energy Transfer Pipeline Delay Threatens Major Oracle Data Center Project

A major natural gas pipeline delay is threatening the schedule for Oracle's proposed $165 billion data center project in New Mexico, illustrating infrastructure challenges for a key new source of gas demand. According to a report from OilPrice.com, the delay involves a project by Energy Transfer subsidiary Transwestern Pipeline.

The Green Chile Project, designed to deliver up to 400 million cubic feet per day of natural gas to Oracle's "Project Jupiter" site in Doña Ana County, has seen its in-service date pushed from August 15 to February 1, 2027. The delay was reported in a regulatory filing on Friday, August 14, 2026.

Oracle's massive data center development plans to use as much as 2.5 gigawatts of gas-powered fuel cells, with the Green Chile pipeline supplying the necessary fuel. The 400 MMcf/d volume is equivalent to roughly 0.4% of total Lower 48 U.S. gas production, highlighting the project's scale. Oracle warned federal regulators in May that "time is of the essence" and that delays to the pipeline could jeopardize the broader project.

The specific cause of the delay, according to the source, is that New Mexico's State Land Office has repeatedly declined to approve Energy Transfer's proposed pipeline route, which crosses a small section of state-owned land.

For Bakken operators and midstream companies like Energy Transfer, which has a significant presence in the Williston Basin, the situation underscores both the opportunity and the hurdle presented by the booming data center and AI sector. Developers are increasingly seeking dedicated, behind-the-meter power generation to avoid long grid connection waits, creating new, large-scale demand for natural gas and the pipelines to deliver it.

Energy Transfer is already capitalizing on this trend elsewhere. The company began supplying gas this year to an Oracle data center campus near Abilene, Texas, and has signed agreements representing more than 6 billion cubic feet per day of new demand across data centers, utilities, and power plants.

The delay in New Mexico shows that securing permits and right-of-way remains a critical bottleneck, even for projects destined to serve a premium, high-growth market. For North Dakota, a state with abundant gas resources seeking value-added markets, the growth of data center demand is a positive long-term signal. However, this incident serves as a reminder that infrastructure development must navigate regulatory landscapes to connect supply with new demand centers.

On the financial markets Friday, Oracle shares were down 4% following the news, while Energy Transfer's stock gained 1.4%.