CloudBurst, a new US data center developer focused on artificial intelligence (AI), is planning a natural gas-powered facility in Texas.

Announced this week, the company has signed a ten-year supply agreement with midstream gas company Energy Transfer to provide its debut Texas data center with behind-the-meter power.

Under the agreement, Energy Transfer will supply CloudBurst’s data center in San Marcos with up to 450,000 metric million British thermal units (MMBtu) of firm natural gas per day. MMBtu is a unit used to measure heat content or energy value.

San Marcos, in Hays County, is located between Austin and San Antonio.

According to the partners, the gas supply has the capacity to generate 1.2GW of direct power. The agreement is subject to CloudBurst reaching a final investment decision (FID) with its customer. If an FID is achieved, the supply agreement is expected to commence upon the data center energization, which is projected for Q3 2026.

“We are very excited about our close relationship with Energy Transfer and feel extremely confident in their ability to provide redundancy through their vast pipeline network and storage capacity,” said Cynthia Thompson, executive chair, CloudBurst Data Centers.

The agreement is Energy Transfer’s first with a data center. It has indicated that it is in discussions with several other data center operators and expects the sector to become a key customer base moving forward.

CloudBurst has shown an interest in signing additional supply agreements with Energy Transfer, with Thompson stating: “We will work closely with Energy Transfer to identify additional potential data center sites, on or close to their strategic natural gas pipeline network, using our proprietary site selection software.”

Headquartered in Dallas, Texas, Energy Transfer has more than 105,000 miles of natural gas gathering, intrastate and interstate transportation pipelines, and storage facilities, with a combined storage capacity of nearly 236 billion cubic feet.

CloudBurst was founded in 2022 and is headquartered in Denver, Colorado. The company claims to focus on the acquisition, development, and operation of data centers suitable for large wholesale or AI deployments. The San Marcos site will be its first development.

The supply agreement follows a trend of data centers seeking direct natural gas supply agreements to power their operations off-grid.

Last week, AI data center developer Crusoe entered into a multi-year framework agreement with natural gas-fired power provider Kalina Distributed Power to develop multiple colocated AI data centers powered by natural gas power plants in Alberta, Canada.

In addition, late last month, it was reported that the first Stargate data center planned for development in Abilene, Texas, would be powered by a 360.5MW off-grid natural gas power plant.