Oracle’s $165B New Mexico Project Slips on Gas Pipeline
Oracle’s planned $165 billion data center campus in New Mexico—Project Jupiter—has hit a low-tech snag: the natural gas pipeline that would help power it won’t be ready on time. Energy Transfer’s Transwestern Pipeline subsidiary pushed the expected in-service date for its Green Chile Project from August 15, 2026, to February 1, 2027, according to a regulatory filing on Friday, August 14, 2026.
The six-month delay threatens the timeline for the massive development in Doña Ana County, near the U.S.-Mexico border. Oracle has not released a revised construction schedule, but the pipeline’s slip could push back the facility’s operational start, potentially affecting revenue expectations tied to the project.
Why the Green Chile Project Matters to Oracle’s Power Plans
The Green Chile Project is a 130-mile natural gas pipeline designed to supply fuel to a new gas-fired power plant that would feed Oracle’s data centers. Without it, Oracle may need to rely on temporary power sources or delay server deployment, increasing costs and extending the payback period for the $165 billion investment.
Natural gas is critical for baseload power in the region, especially as solar and wind can be intermittent. The pipeline’s delay underscores how infrastructure bottlenecks—not just chip supply or cooling—can derail hyperscale data center projects.
What the Delay Means for Oracle’s Cash Flow and AI Ambitions
Oracle’s Project Jupiter is central to its AI cloud strategy, competing with Microsoft and Amazon for enterprise AI workloads. A six-month delay could postpone when the facility begins generating revenue, but Oracle’s existing cloud growth remains strong—revenue rose 26% year-over-year in the fiscal fourth quarter ended May 31, 2026, driven by AI demand.
However, the company is spending heavily: capital expenditures reached $15.6 billion in that quarter, up from $9.4 billion a year earlier. Any slippage in Project Jupiter could strain those cash flows, though Oracle has not revised its fiscal 2027 capex guidance of $85 billion.
Energy Transfer’s Regulatory and Revenue Exposure
For Energy Transfer, the delay is a regulatory and operational setback. The Green Chile Project is part of its $2.7 billion expansion portfolio, and the revised in-service date avoids a breach of its Federal Energy Regulatory Commission (FERC) certificate, but it still signals execution risk.
Energy Transfer’s stock has risen 18% in 2026, buoyed by record natural gas volumes. However, investors may see this as a minor blemish; the company has not changed its full-year EBITDA guidance of $16.8 billion, and the pipeline’s delay affects only a small portion of its portfolio.
Broader Infrastructure Risks for Hyperscale Data Centers
The Oracle delay is not isolated. Across the U.S., data center developers are grappling with power and pipeline lead times. In Virginia, for instance, new transmission lines are backlogged until 2029, and in Texas, natural gas interconnects face similar waits.
Analysts at Goldman Sachs noted in a July 2026 report that power infrastructure is now the top bottleneck for AI data center growth, with 40% of projects facing at least six-month delays. This could raise costs industry-wide, but it also creates opportunities for utilities and midstream companies like Energy Transfer, which can command premium rates for fast-tracked projects.
What to Watch: February 2027 and Oracle’s Revised Schedule
The key date now is February 1, 2027, when Transwestern expects to complete the pipeline. Watch for Oracle to issue a revised timeline for Project Jupiter—if it slips beyond the second quarter of 2027, that would signal deeper issues. Also monitor Energy Transfer’s quarterly earnings for any cost overruns related to the delay.
If the pipeline comes online on schedule, Oracle could still meet its original 2027 launch target for the first phase. But any further delay would likely push the project’s breakeven point into 2029, making the stock more sensitive to AI demand fluctuations.
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