Firm Natural Gas Transportation for Data Center On-Site Power

Buying natural gas and moving it are separate transactions. The gas itself is purchased from a producer or marketer; transportation is the service of carrying it through a pipeline from a receipt point to a delivery point. For a data center planning behind-the-meter generation, the transportation contract decides whether fuel shows up on the coldest day of the year.

Firm transportation (FT) reserves a fixed quantity of pipeline capacity for the shipper. The shipper pays a reservation charge for that capacity every month whether or not it uses it, and those reservation payments are how pipelines recover the cost of building and operating the system.² In return, the pipeline is expected to deliver except in extraordinary events. An INGAA survey found interstate pipelines delivered 99.79% of firm commitments to customers’ primary delivery points.¹

Interruptible transportation (IT) has no reserved capacity. The pipeline may suspend, reduce or decline to schedule it under its tariff and FERC policy, typically when firm shippers are using the space.¹ It costs less because the shipper pays only for gas actually moved, but that availability disappears in exactly the conditions that matter most for a facility with no other source of power.

The electric side has the same split. Our guide to firm vs. interruptible electric service covers it, and the logic carries over: whichever system is the primary source of power should be firm.

Gas supply problems cluster in extreme cold, when heating demand fills pipelines and wellhead production can freeze. The FERC and NERC review of Winter Storm Elliott in December 2022 is the most recent large example. During the storm, 1,702 generating units had 3,565 outages, derates or failures to start, and 825 of those units were gas fired.³ Fuel issues caused 24% of the unit problems, with natural gas fuel issues alone at 20%, and grid operators shed a total of about 5,000 MW of firm load.³

The report concluded that congressional and state action is needed to set reliability rules for natural gas infrastructure, and it called for better communication between gas and electric operators during extreme cold.³ Until those rules exist, a data center depends on its own contracts. Firm transportation does not remove supply risk, since the shipper still has to buy gas, but it secures the shipper’s place in the pipe.

The need varies by role. A plant that serves as the campus’s only source of power, as in an off-grid design, needs firm transportation sized to full load. A plant that provides bridge power until a grid connection arrives may accept some interruptible exposure if diesel or batteries can cover gaps. Emergency backup that runs a few hours a year usually relies on stored fuel instead. The on-site generation and bridge power guide covers those configurations.

A pipeline crossing near a site does not mean capacity is available on it. Mainline capacity is often fully subscribed by utilities, producers and power plants on long-term contracts. A developer has three basic paths to firm capacity.

1. 01Unsubscribed capacity on an existing pipeline, if the pipeline has some at the needed receipt and delivery points.
2. 02An expansion, in which the pipeline holds an open season, signs shippers to precedent agreements and builds new compression, looping or laterals backed by those contracts.
3. 03Released capacity bought from an existing firm shipper. FERC’s capacity release program lets firm shippers sell unneeded capacity to replacement shippers, with releases posted on the pipeline’s electronic bulletin board for bidding.⁸

FERC describes capacity release as an important tool for gas-fired generators without firm rights during periods of high demand such as winter storms.⁸ It is useful for filling gaps, but release terms are set by the releasing shipper and rarely match a 15- or 20-year data center horizon.

Jurisdiction matters too. Interstate pipelines are regulated by FERC, while intrastate pipelines that stay within one state are regulated by state agencies. Intrastate builds have outpaced interstate ones: according to EIA data, lines crossing state lines accounted for 14% of new pipeline capacity in 2023, compared with 65% in 2017, with most intrastate additions in Texas and Louisiana.⁹ In those states, firm service may be negotiated with an intrastate pipeline under state rules rather than a FERC tariff. The pipeline access guide explains how to identify which pipelines serve a site.

Most data center gas projects need new pipe, at least a gas lateral from the mainline to the plant. On an interstate system, Section 7(c) of the Natural Gas Act requires a certificate of public convenience and necessity from FERC before building, and the review runs through pre-filing, application, environmental and agency review, authorization and post-certificate stages.⁵

Smaller projects can use the blanket certificate program instead of a case-specific order. Projects under the lowest cost limit are authorized automatically; larger ones go through prior notice, and the pipeline may begin construction 60 days after FERC notices the project if no protest is filed.⁶ FERC treats blanket activities as categorically excluded from preparing an environmental assessment or impact statement under NEPA.⁶

Cost limits have been moving. In June 2025, FERC temporarily waived its rules to raise the prior-notice limit from $41.1 million to $61.65 million for projects placed in service by May 31, 2027.⁷ In May 2026, it proposed expanding the scope and scale of blanket projects and increasing cost limits, and extended the temporary waiver to projects placed in service by May 2028.¹⁰ Because the figures change, confirm current limits with the pipeline before assuming a lateral qualifies.

Public deals show the shape of these contracts. In November 2025, Energy Transfer and Entergy Louisiana announced a 20-year agreement for 250,000 MMBtu per day of firm transportation from February 2028 through January 2048, with an option to expand.⁴ Energy Transfer will extend its Tiger Pipeline with a 12-mile lateral able to carry up to 1 Bcf per day to serve Entergy’s growth in north Louisiana.⁴ In 2026, S&P Global reported Energy Transfer agreeing to provide firm transportation to a behind-the-meter campus in Central Texas, starting at 150 MMcf per day at the end of 2026.¹¹

Rate structure is worth a close read. When a pipeline cannot deliver firm service, it generally must issue reservation charge credits after a safe-harbor period of up to 10 days, but FERC has allowed pipelines to drop those credits for service sold at negotiated or discounted rates.² A lower negotiated rate can therefore come with weaker remedies.

Not every deal puts the data center in the shipper’s seat. In New Albany, Ohio, the Ohio Power Siting Board approved a 200 MW gas plant built by a Williams subsidiary to serve a Meta data center, dedicated to a single customer and not physically connected to the grid.¹² Filings described gas arriving through two 24-inch pipelines, with Williams intending to secure firm delivery from third parties.¹³ Whoever owns the plant, the firm contract should be reviewed as closely as the power agreement.

Firm capacity is sized on peak-day fuel burn, not average use. The quantity depends on generator heat rate, load factor and any redundancy, so engineers should set it, but a quick calculation shows the scale. The gas turbines vs. reciprocating engines guide covers how technology choice changes efficiency.

Demand for this capacity is rising quickly. Enverus projects about 62 GW of new Lower 48 data center capacity through 2030, with behind-the-meter projects around 40% of it, implying roughly 1.3 Bcf per day of added gas demand.¹⁴ PwC projects AI-linked gas demand could reach 7.6–11.5 Bcf per day by 2035 depending on build-out, and argues infrastructure, not capital, may be the main constraint.¹⁵ TC Energy said in 2024 that it was fielding many more inquiries about tapping its mainline and building laterals to data centers with on-site generation, and that contract structures were still being worked out.¹⁶ Treat these as forecasts, and expect the best-located capacity to be contracted early.

• Which pipelines can physically reach the site, and whether each is interstate or intrastate.⁹
• Whether firm capacity exists today at a workable receipt and delivery point, or only after an expansion.
• Lateral length, route, easements and whether the project fits blanket limits or needs a full certificate.⁶⁵
• Contract quantity sized to peak burn, with term matching the power plan.
• Reservation charge credits and other remedies, especially in negotiated-rate deals.²
• Cold-weather plans: dual fuel, storage or batteries if gas is curtailed.³

Gas also brings air permitting, covered in air permits for data center generators, and a broader choice covered in grid power vs. on-site generation. If you want a site screened for pipeline access and a realistic path to firm capacity, you can get a site reviewed. Confirm contract and regulatory details with the pipeline and qualified counsel.