Oracle Drops 5% as Key Natural Gas Pipeline for 'Stargate' AI Data Center Delayed

A major artificial intelligence data center initiative under Oracle has encountered a new obstacle: a nearly six-month delay in a key natural gas supply project, raising doubts about whether the $165 billion investment can be completed on schedule.

Transwestern Pipeline, a subsidiary of pipeline operator Energy Transfer LP, disclosed in a regulatory filing on Friday that the expected commissioning date for the "Green Chile Project" natural gas pipeline has been extended from the previous August 15, 2026, to February 1, 2027.

This pipeline is the core infrastructure providing fuel for Oracle's "Project Jupiter" data center, which is also one of the most critical components of the Stargate mega-deal signed between Oracle and OpenAI.

Following the announcement of the delay, Oracle's stock fell by as much as 4.6%. A spokesperson subsequently stated, "Project Jupiter remains on track, and we continue to work closely with our partners to move the project forward." The stock rebounded following the spokesperson's comments, ultimately closing down 3.7%.

Pipeline Approval Blocked, Progress Repeatedly Set Back

The delay in the Green Chile Project pipeline stems primarily from the New Mexico State Land Office's repeated refusal to approve the route proposed by Energy Transfer, which crosses a small parcel of state-owned public land. The project site, located just a few miles north of the U.S.-Mexico border, has sparked protests among local residents, whose concerns mainly focus on potential environmental impacts.

Despite securing a package of tax incentives and government-backed bonds, the project faces significant resistance in approvals at both the state and federal levels.

Josh Garcia, Senior North America Natural Gas Analyst at energy consultancy Energy Aspects, pointed out that given the numerous obstacles Energy Transfer has encountered in the two-tier approval process, the new expected commissioning date of February 1, 2027, "may not be realistic." He stated:

"We expect the Green Chile Project to commence operations no earlier than the second half of 2027, but if substantial progress is not made in the coming months, it faces the risk of cancellation."

Massive Scale of Project Jupiter Makes Pipeline Crucial

Project Jupiter plays a pivotal role in Oracle's AI data center layout. According to plans, the facility will be powered by Bloom Energy fuel cells with a capacity of up to 2.5 gigawatts, making it one of the largest AI data centers currently under construction.

The Green Chile Project pipeline is designed with a maximum transmission capacity of 400 million cubic feet per day, equivalent to approximately 0.4% of the total natural gas production in the contiguous 48 United States, highlighting the immense energy demand of this data center.

In May of this year, Oracle told federal energy regulators that the approval timeline for the Green Chile Project was "tight," and that any delays would jeopardize the "overall objectives of Project Jupiter."

Oracle also noted that Project Jupiter represents an investment of up to $165 billion in Doña Ana County, New Mexico.