Oracle Corporation encountered a fresh hurdle for its major artificial intelligence data center plan, as the crucial gas supply pipeline project has been delayed by nearly six months, casting doubt over whether the $165 billion investment can be completed on schedule.
Pipeline operator Energy Transfer LP's subsidiary, Transwestern Pipeline, disclosed in a regulatory filing on Friday that the expected commercial operation date for the "Green Chili Project" natural gas pipeline has been pushed back from August 15, 2026, to February 1, 2027.
This pipeline is the core infrastructure for fueling Oracle's "Project Jupiter" data center, which is also one of the most critical components of the Stargate contract signed between Oracle and OpenAI.
Following the delay announcement, Oracle shares fell as much as 4.6% before recovering after a spokesperson stated, "Project Jupiter remains on track, and we continue to work closely with our partners to move it forward." The stock ultimately closed 3.7% lower.
Pipeline Approval Stalled, Progress Repeatedly Frustrated
The root cause of the Green Chili Project's delay lies in the New Mexico State Land Office repeatedly rejecting Energy Transfer's proposed pipeline route, which crosses a small portion of state-owned public land. The project, located just a few miles north of the U.S.-Mexico border, has already sparked protests from local residents, primarily over potential environmental impacts.
Despite receiving a package of tax incentives and government-backed bonds, the project faces significant resistance at both the state and federal approval levels.
Josh Garcia, senior analyst for North American natural gas at Energy Aspects, noted that given the substantial obstacles Energy Transfer has encountered at both levels of approval, the new expected commercial operation date of February 1, 2027, "may not be realistic." He stated, "We expect the Green Chili Project to be operational no earlier than the second half of 2027, but it faces the risk of cancellation if no substantial progress is made in the coming months."
Project Jupiter's Vast Scale Makes the Pipeline Crucial
Project Jupiter holds a significant position in Oracle's AI data center strategy. The facility is planned to be powered by up to 2.5 gigawatts of fuel cells from Bloom Energy, making it one of the largest AI data centers under construction.
The Green Chili Project pipeline is designed with a capacity of up to 400 million cubic feet of natural gas per day, roughly equivalent to 0.4% of the total natural gas production in the lower 48 U.S. states, highlighting the enormous energy needs of the data center.
Oracle told the Federal Energy Regulatory Commission in May that approval for the Green Chili Project was "time-sensitive" and that any delay would jeopardize "the overall objectives of Project Jupiter."
Oracle also noted that Project Jupiter represents up to $165 billion in investment in Do帽a Ana County, New Mexico.
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