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

Energy Transfer (ET) has locked in major natural gas contracts with Oracle (ORCL), Meta (META), and utility Entergy (ETR) to supply AI data centers requiring on-site power generation. The buildout includes the $2.7 billion Hugh Brinson pipeline and the $5.6 billion Desert Southwest pipeline, leveraging ET's 107,000-mile network to deliver gas for turbines and fuel cells powering compute infrastructure.

The company expects 17.5% EBITDA growth driven by data center demand, with distribution increases of 3–5% annually. AI facilities are turning to gas-fired generation to avoid grid constraints and secure dedicated capacity, a shift that positions midstream operators with extensive pipeline reach as critical infrastructure partners. Crusoe also signed on as a customer, adding to ET's AI-linked revenue base.

Permitting delays remain a risk that could slow project timelines, though the contracts already secured provide visibility into near-term cash flow.