Pipeline Delay for New Mexico Data Center Highlights Energy Demand Link

A major pipeline delay for a planned $165 billion data center project in New Mexico underscores the critical link between energy infrastructure and burgeoning industrial demand, a dynamic with implications for Bakken natural gas producers. According to a report from OilPrice.com, Energy Transfer subsidiary Transwestern Pipeline has pushed the in-service date for its Green Chile Project from August 15 to February 1, 2027.

The six-month delay threatens the schedule for Oracle's "Project Jupiter" data center development in Doña Ana County. The scale of the planned energy use is substantial, with the project potentially using 2.5 gigawatts of gas-powered fuel cells supplied by Bloom Energy. The Green Chile pipeline is designed to deliver up to 400 million cubic feet per day of natural gas to the site, an amount equivalent to roughly 0.4% of total Lower 48 U.S. gas production.

Oracle warned federal regulators in May that "time is of the essence" and said delays to Green Chile could jeopardize the broader project. The specific holdup, 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.

This setback illustrates a key constraint emerging alongside the rapid buildout of AI data centers. Developers are increasingly seeking dedicated power generation to avoid long waits for grid connections, but this behind-the-meter strategy still requires reliable fuel supply, pipelines, and permits. For Bakken operators, this trend represents a potential source of new, stable demand for natural gas, provided the necessary transportation infrastructure can be built.

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.

The market reaction on Friday reflected the news, with Oracle shares down 4% and Energy Transfer's stock gaining 1.4%. While the specific project is in New Mexico, the situation highlights a national pattern where technological growth is directly tied to fossil fuel infrastructure. For North Dakota, a major gas-producing region within the Bakken formation, the success of projects like Green Chile in securing permits and meeting timelines is a bellwether for the ability to connect its resources to new, high-volume customers in the evolving digital economy.