Feb 10 (Reuters) - U.S. pipeline operator Energy

Transfer ( ET ) on Monday entered into a long-term natural gas

supply agreement with private, Denver-based company CloudBurst

Data Centers for its development in Central Texas.

With rising power demands from AI and slow grid

advancements, data centers are bypassing traditional utilities

to secure energy directly from producers or establish their own

supplies, which could significantly boost natural gas

consumption later in the decade.

Energy Transfer ( ET ) will provide up to 450,000 million British

thermal units per day of firm natural gas through its Oasis

Pipeline to CloudBurst's campus outside of San Marcos, Texas,

contingent upon the data center operator reaching a final

investment decision (FID) with its customer.

The natgas supply will generate up to nearly 1.2 gigawatts

of direct electric power for a period of at least 10 years

starting with Phase 1 of the data center facilities, the

pipeline operator said.

The Dallas, Texas-based company also said the agreement

marks its first commercial arrangement to supply natural gas

directly to a data center.

CloudBurst expects to reach FID later this year and the

facility could be operational in the third quarter of 2026.