Oracle's 'Stargate' key AI data center supporting natural gas pipeline rejected twice; seeks rerouting

A proposed natural gas pipeline intended to supply a major Oracle artificial intelligence data center has adjusted its route after its previous construction plan was rejected by New Mexico state regulators. Energy Transfer LP—the company responsible for building and operating the pipeline—has now applied to lay part of the 17.8-mile (approximately 28.6-kilometer) pipeline across land managed by the U.S. Bureau of Land Management (BLM). In a letter submitted to the U.S. Federal Energy Regulatory Commission (FERC) on August 17, Transwestern—a subsidiary of Energy Transfer—stated that the revised plan would avoid land administered by the New Mexico State Land Office. Previously, the New Mexico State Land Office had rejected the pipeline’s right-of-way application twice. As reported earlier by Wall Street Insights, this project is one of the most critical components of the 'Stargate' mega-contract; the delay in the supporting natural gas pipeline once caused Oracle’s stock to plunge nearly 5% intraday. At the time of writing, Oracle was down 2.2% during Tuesday’s trading session.

Oracle briefly fell 5%; key natural gas pipeline for 'Stargate' AI data center delayed

Oracle’s ambitious large-scale AI data center initiative has hit a new snag: its critical natural gas supply pipeline has been delayed by nearly six months, raising concerns among observers about whether this $165 billion investment project can be completed on schedule. Transwestern Pipeline, a subsidiary of pipeline operator Energy Transfer LP, disclosed in a regulatory filing on Friday that the projected in-service date for the 'Green Chile Project' natural gas pipeline has been pushed back from the original August 15, 2026, to February 1, 2027. This pipeline serves as core infrastructure fueling Oracle’s 'Project Jupiter' data center—an integral component of Oracle’s Stargate mega-contract with OpenAI. Following the announcement of the delay, Oracle’s stock briefly dropped 4.6%. A company spokesperson subsequently stated: 'Project Jupiter remains on track, and we continue to work closely with our partners to advance the project.' After this statement, the stock partially rebounded, ultimately closing down 3.7%. Pipeline permitting hurdles and repeated setbacks The Green Chile Project pipeline delay stems from repeated rejections by the New Mexico State Land Office of Energy Transfer’s proposed routing—which traverses a small parcel of state-owned public land.

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Oracle Asks Regulators to Expedite Gas Pipeline for Data Center

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FAQ