Pine Cliff Energy has entered into a 25-year supply agreement with a private data center developer to supply natural gas in Alberta, Canada.
The company will deliver between 3.2 MMcf/d1 (million cubic feet per day) and 4.8 MMcf/d1 of natural gas to power a planned off-grid data center adjacent to an operating Pine Cliff facility in Central Alberta.
Under the terms of the agreement, Pine Cliff will supply natural gas and receive a natural gas price based on a rolling 12-month average of NYMEX (Natural Gas Futures Prices) price.
The supply agreement will commence upon the data center's commissioning. It includes obligatory milestones regarding the timing of construction, receipt of regulatory approvals, and the data center's entry into commercial operations.
Pine Cliff is an Alberta-based natural gas and crude oil company. In Q3 2024, Pine Cliff's natural gas production averaged 108.0 MMcf/d.
Alberta has become a hotbed for data centers seeking behind-the-meter gas supply agreements. The province currently produces more than half of Canada's natural gas supply, which is only expected to increase. According to data from the Alberta Energy Regulator, 1140 new gas wells are expected to be placed into production by 2033.
In recent months, several data center operators have signed supply deals with natural gas companies to power their operations.
Earlier this month, Gryphon Digital Mining agreed to purchase an 850-acre industrial site with access to a natural gas supply from Captus Energy in Southern Alberta, where it plans to develop an on-site AI data center powered by natural gas. The site's initial generation capacity is 100MW, which the company claims can be scaled to 4GW.
In addition, in November, power generator TransAlta reported it was in talks with major data center operators interested in building sites in Alberta, Canada.
However, concerns about grid reliability have led Alberta Premier Danielle Smith to legislate that data centers must "bring their own electricity, bring their own generation, and partner with a generating company" if they wish to set up shop in Alberta.
As a result, data center operators are seemingly targeting off-grid agreements with natural gas companies as an easier route to market for their operations in the province.
