Energy Transfer Is Quietly Becoming One of the Biggest Natural Gas Suppliers to AI Data Centers

If you were making a list of the companies cashing in on the AI data center build-out boom, a gas pipeline company known for paying dividends probably wouldn't be there. That could be a costly omission. Pipeline giant Energy Transfer (NYSE:ET) has quietly become one of the biggest natural gas suppliers to data centers. That's putting it in a strong position to cash in on the AI power boom.

Here's a closer look at why Energy Transfer should be on your AI investment list.

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Data centers need lots of power, and they need it quickly. The country's electric grid can't keep up with the load requirements or the need for speed. As a result, natural gas is becoming a critical solution to the AI power problem. A growing number of data center developers are turning to gas to fuel on-site power from gas turbines and fuel cells.

They're also turning to Energy Transfer as their gas supplier of choice. Its extensive gas infrastructure includes nearly 107,000 miles of pipelines linking supply sources to demand centers. It has signed several deals to supply gas to support AI data center demand.

One of its biggest deals is with cloud giant Oracle . Energy Transfer will provide about 900,000 Mcf/d of natural gas to three of its U.S. data centers. Oracle is using this gas to power Bloom Energy 's advanced fuel cells at one of the sites. It also has a 150,000 Mcf/d deal to supply Nexus with gas for an AI hyperscale campus currently under construction, and an agreement to supply gas to support a 900-megawatt AI factory campus for Crusoe. Additionally, it has an agreement to provide 150,000 Mcf/d of gas to a data center site in Arkansas.

Energy Transfer is also providing more gas to utilities to support growing power demand from AI data centers. It signed a 20-year deal with Entergy to provide at least 250,000 MMBtu/d of gas starting in December 2028. Entergy needs more gas to power data centers, including those Meta Platforms is building in Louisiana. Additionally, it's supplying a total of 300,000 Mcf/d of gas to four new gas-fired power plants in Oklahoma between now and the end of 2028.

Those projects are only the beginning. Energy Transfer is in advanced discussions with multiple power plants, data centers, and other demand customers for significant additional gas volumes.