Oracle is transporting natural gas by truck to fuel its data centers in Utah and Texas, an unconventional strategy to bypass pipeline delays. The company may extend this gasoducto virtual
approach to its massive Project Jupiter campus in New Mexico, where infrastructure hurdles have pushed the anticipated in-service date to February 2027.
Trucking Strategy as a Stopgap for AI Infrastructure
As Oracle pushes to expand its artificial intelligence footprint, the firm faces a significant energy bottleneck. To keep server farms operational while awaiting permanent connections, the company has begun relying on companies like VoltaGrid LLC and Certarus to deliver compressed natural gas via truck. This method, which involves extracting gas from existing pipelines, compressing it into trailers, and transporting it to data center sites for decompression, allows facilities to run on-site generators without waiting for local gas utility extensions.
The urgency of the strategy stems from the massive scale of Oracle’s AI ambitions. The company’s cloud infrastructure revenue rose 121% year-over-year to $7.4 billion in the most recent quarter, with contracted future revenue reaching $664 billion. Capital spending has reached $28.5 billion for the quarter, compared to $8.5 billion during the same period last year, as the company plans to spend between $90 billion and $95 billion in fiscal 2027.
Permitting Disputes at Project Jupiter
The proposed expansion of the trucking model to the 2.45-gigawatt Project Jupiter in New Mexico highlights the regulatory challenges facing the company’s energy plans. The project relies on a planned pipeline from Energy Transfer LP, but the route has faced multiple rejections from state officials, pushing the anticipated in-service date to February 2027.
On October 6, New Mexico Attorney General Raúl Torrez challenged the environmental review of the pipeline, arguing that federal regulators failed to properly connect the pipeline’s impact to the data center it is intended to serve. These regulatory hurdles have forced Oracle to consider temporary measures to keep the project on track for its 2028 operational target. The company even issued a force-majeure notice on September 24 regarding power-infrastructure hurdles, a move that could potentially shield it from certain financial liabilities.
Economic Trade-offs of Compressed Gas
While the trucking solution provides immediate capacity, it comes with a high price tag. Experts estimate that using trucked compressed natural gas is roughly four times more expensive than receiving fuel through a permanent pipeline. Jack Weixel, senior director of energy analysis at East Daley Analytics, noted that combining labor costs, specialized equipment, and fuel for the trucks drives the final expense far above standard pipeline distribution. Ellie Holbrook, an energy analyst at SemiAnalysis, pointed out that if Oracle supplied just 100 megawatts using compressed natural gas deliveries, each large tanker would provide electricity for a mere 40 minutes.
Even with the high costs, companies are prioritizing speed to market. Certarus noted that the extended timelines for connecting data centers to traditional power grids have generated a growing need for scalable and rapidly deployable energy solutions. However, analysts warn that if this model continues for an extended period, the increased fuel expenditures could begin to erode the company’s profit margins.
Oracle Leverages Virtual Gasoducto Strategy for Energy Solutions
For now, Oracle continues to leverage its gasoducto virtual
strategy, publicly praising partners like VoltaGrid for finding cost-effective energy solutions that ensure our customers can access OCI capacity as planned.