Energy Transfer and CloudBurst Sign Agreement for Natural Gas Supply to Data Center Project in Central Texas

Rhea-AI Summary

Energy Transfer LP (NYSE: ET) has signed a long-term agreement with CloudBurst Data Centers to supply natural gas to CloudBurst's AI-focused data center in Central Texas. Through Energy Transfer's Oasis Pipeline, the company will provide up to 450,000 MMBtu per day of firm natural gas supply, sufficient to generate 1.2 gigawatts of direct power for at least 10 years.

The agreement is subject to CloudBurst reaching a final investment decision (FID) with its customer, expected later this year. If approved, the facility would become operational in Q3 2026. This marks Energy Transfer's first commercial arrangement to supply natural gas directly to a data center, leveraging its network of over 105,000 miles of natural gas infrastructure and storage facilities with a combined capacity of nearly 236 billion cubic feet.

Positive

• Secured long-term agreement for up to 450,000 MMBtu daily gas supply
• 10-year minimum contract duration provides stable revenue stream
• First entry into data center market segment, with potential for additional agreements
• Leverages existing infrastructure without requiring significant new investment

Negative

• Agreement contingent on CloudBurst reaching final investment decision
• No immediate revenue impact as operations won't start until Q3 2026

Insights

Energy Infrastructure Analyst

Energy Transfer's landmark agreement with CloudBurst marks a strategic pivot into the rapidly growing data center power market, potentially creating a new revenue stream that could significantly impact the company's future growth trajectory. The deal's scale is substantial - at 450,000 MMBtu per day, this represents approximately 2% of ET's current total natural gas throughput capacity.

The timing is particularly strategic as AI-focused data centers are experiencing unprecedented demand for power. With ET's extensive 105,000-mile pipeline network and 236 billion cubic feet storage capacity, they hold a competitive advantage in providing reliable, redundant power supply infrastructure - a critical requirement for data center operations.

Three key factors make this deal particularly significant for investors:

• Market Expansion: This represents ET's first entry into direct data center supply, with strong indicators of more agreements to follow
• Infrastructure Leverage: The company can monetize existing assets without significant capital expenditure
• Growth Catalyst: The data center power market is experiencing exponential growth, driven by AI computing demands

However, the agreement's execution depends on CloudBurst reaching FID with its customer, expected later this year. If successful, operations would commence in Q3 2026, establishing a template for similar deals across ET's nationwide footprint. The company's discussions with other data center developers suggest this could be the beginning of a larger strategic initiative to diversify its customer base and capture value from the digital infrastructure boom.

Gas Supply Expected to Generate Up to 1.2 Gigawatts of Direct Power to AI-Focused Data Center

DALLAS & DENVER--(BUSINESS WIRE)-- Energy Transfer LP (NYSE: ET) today announced that it has entered into a long-term agreement with Denver-based CloudBurst Data Centers, Inc. (“CloudBurst”) to provide natural gas to CloudBurst’s flagship AI-focused data center development in Central Texas.

The agreement calls for Energy Transfer’s Oasis Pipeline, LP to provide up to 450,000 MMBtu per day of firm natural gas supply to CloudBurst’s Next-Gen Data Center campus outside of San Marcos, Texas, subject to CloudBurst reaching a final investment decision (FID) with its customer. The natural gas supply would be sufficient to generate up to approximately 1.2 gigawatts of direct, or “behind-the-meter” electric power for a period of at least 10 years starting with Phase 1 of the data center facilities. CloudBurst expects to reach FID later this year and in such event the facility would be operational in Q3 of 2026.

This represents Energy Transfer’s first commercial arrangement to supply natural gas directly to a data center. Energy Transfer is uniquely positioned to provide reliable natural gas supply that is crucial to the data center operations under development, many of which are in close proximity to its vast network of more than 105,000 miles of natural gas gathering, and intrastate and interstate transportation pipelines and storage facilities with a combined storage capacity of nearly 236 billion cubic feet. Additionally, Energy Transfer is in discussions with a number of data center developers and expects this to be the first of many agreements to supply, store and transport natural gas to fuel data centers, electric generation facilities and other power demand customers throughout its nation-wide footprint.

“We are very excited about our close relationship with Energy Transfer and feel extremely confident in their ability to provide redundancy through their vast pipeline network and storage capacity. In addition, we will work closely with Energy Transfer to identify additional potential data center sites, on or close to their strategic natural gas pipeline network, using our proprietary site selection software,” said Cynthia Thompson Executive Chair, CloudBurst Data Centers, Inc.

About Energy Transfer

Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 130,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 44 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (“NGL”) and refined product transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 21% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 39% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at www.energytransfer.com.

About CloudBurst

CloudBurst Data Centers, Inc., develops digital infrastructure powered by transition, green and renewable energy solutions with the aim of meeting the growing demand of the next generation (Next-Gen) of AI and data-led enterprises. Our mission is to build and operate AI/HDC, modular, Next-Gen Data Centers powered by the most economic energy solutions, but with an emphasis on being first to market offering Value, Reliability, Innovation, Service, Efficiency, Sustainability, and Security.

For more information, please visit CloudBurst’s website at www.cloudburstdc.com or contact Cynthia Thompson, Executive Chair, cthompson@cloudburstdc.com or Roy Davis, President, rdavis@cloudburstdc.com.

Forward-Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results, including factors that may impact Energy Transfer’s operations, capital projects and future growth, are discussed in its Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Energy Transfer and CloudBurst undertake no obligation to update or revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at energytransfer.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250207943457/en/

Energy Transfer Contacts:

Media Relations

Vicki Granado or Jeff Tieszen

214-840-5820

media@energytransfer.com

Investor Relations

Bill Baerg, Brent Ratliff or Lyndsay Hannah

214-981-0795

CloudBurst Contacts:



Cynthia Thompson

Executive Chair & CBDO,

cthompson@cloudburstdc.com

713-443-7170

Roy Davis, President & CMO

rdavis@cloudburstdc.com

702-358-3929

Source: Energy Transfer LP

FAQ

What is the capacity of Energy Transfer's gas supply agreement with CloudBurst?

Energy Transfer will provide up to 450,000 MMBtu per day of firm natural gas supply, capable of generating 1.2 gigawatts of direct power.

When will CloudBurst's Texas data center become operational under the ET agreement?

The data center is expected to become operational in Q3 2026, subject to CloudBurst reaching a final investment decision later in 2024.

How long is Energy Transfer's supply agreement with CloudBurst?

The supply agreement has a minimum duration of 10 years, starting with Phase 1 of the data center facilities.

What is the storage capacity of Energy Transfer's natural gas infrastructure?

Energy Transfer has storage facilities with a combined capacity of nearly 236 billion cubic feet across its 105,000-mile pipeline network.

Is this ET's first data center gas supply agreement?

Yes, this is Energy Transfer's first commercial arrangement to supply natural gas directly to a data center.