Natural gas has become a highly sought-after commodity in the age of artificial intelligence! Energy Transfer (ET.US) has successfully secured a gas supply agreement with an AI data center located in Texas.

U.S. pipeline operator Energy Transfer (ET.US) will directly supply natural gas to CloudBurst Data Centers to meet the surge in power demand caused by artificial intelligence (AI).

Energy Transfer said in a statement on Monday that its Oasis Pipeline, LP will provide up to 450,000 million British thermal units of natural gas per day to power the CloudBurst data center campus located outside San Marcos, Texas. The pipeline will bypass the existing power grid and directly supply power to the data centers.

Natural gas plant operators, producers, and pipeline companies are vying for opportunities to meet the energy needs of artificial intelligence. Natural gas power plants have become the most competitive power solution because they are cheaper and faster to build than reactors and can run around the clock unlike wind and solar power.

The deal marks the first long-term direct supply of natural gas to a data center for Energy Transfer, according to the statement. The company plans to supply natural gas to more data centers.

The natural gas supply will be enough to generate 1.2 gigawatts of power, enough to serve at least 120,000 households in the state grid, according to the statement. The companies expect the facility to be operational in the third quarter of 2026.

CloudBurst designs, builds, and operates energy infrastructure for artificial intelligence, according to the statement.

As of Monday's close, Energy Transfer rose 0.8%. The stock has gained 4.2% this year.