Energy Transfer's Green Chile Pipeline Delayed, Threatening Major New Mexico Data Center

A six-month delay for a key natural gas pipeline project in New Mexico is threatening the schedule for Oracle’s proposed $165 billion data center development, according to a report from Oilprice.com. The setback underscores the infrastructure challenges emerging with the rapid buildout of power-intensive data centers, a trend that is creating significant new demand for natural gas, including from the Bakken region.

Energy Transfer subsidiary Transwestern Pipeline has pushed the expected in-service date for its Green Chile Project from August 15 to February 1, 2027, according to a regulatory filing on Friday, August 14. The pipeline is designed to deliver up to 400 million cubic feet per day of natural gas to the site of Oracle’s "Project Jupiter" in Doña Ana County, New Mexico. That volume is equivalent to roughly 0.4% of total Lower 48 U.S. gas production.

The delay is a direct threat to the data center project, which could use as much as 2.5 gigawatts of gas-powered fuel cells. Oracle warned federal regulators in May that “time is of the essence” and said delays to Green Chile could jeopardize the broader project. According to Oilprice.com, 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.

The situation illustrates a critical constraint for the AI-driven data center expansion: while developers seek dedicated power generation to avoid grid connection delays, this behind-the-meter strategy still requires reliable fuel delivery via pipelines and permits. For Bakken producers and midstream companies like Energy Transfer, which has a major presence in the Williston Basin, this trend represents a substantial new source of demand growth for natural gas.

Energy Transfer is already capitalizing on this shift in other regions. 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, Oilprice.com reported.

For North Dakota, the ongoing national push to build pipelines to serve new power demand is a positive long-term signal. Increased takeaway capacity and market outlets for natural gas, a key byproduct of Bakken oil production, help improve well economics and reduce flaring. The delay of a single project like Green Chile highlights the permitting hurdles that can slow infrastructure development, but the scale of committed demand—billions of cubic feet per day—points to a durable new market for natural gas volumes that could originate in basins like the Bakken.

The financial markets reacted to the news on Friday, with Oracle shares down 4% in afternoon trading, while Energy Transfer's stock gained 1.4%.