ExxonMobil, the US-based multinational oil and gas giant, has unveiled plans to build a new 1.5GW natural gas-fired power plant to supply energy specifically for data centers. The project, currently in the early development stages, would be a significant departure for Exxon, marking the first time the company has constructed a power plant not intended for its own operations.
The move comes as demand for electricity is expected to surge, driven by the rapid growth of data centers across the US. Exxon sees this as an opportunity to enter the power business, which it began exploring this year.
In a statement, Exxon CEO Darren Woods said, “There are very few opportunities in the short term to power those data centers and do it in a way that minimizes, if not completely eliminates, the emissions.” The company plans to integrate carbon capture technology at the plant, aiming to capture over 90% of the emissions produced by the facility.
Although Exxon has not disclosed the location or cost of the new plant, it has secured land for the facility and is in discussions with potential data center customers to purchase the power generated. Dan Ammann, an Exxon executive, emphasized the strategic advantages of the project, noting to The New York Times, “We’re being driven by the market demand here. It’s low carbon, it’s available on an accelerated timeline, and it avoids all the grid interconnection challenges.”
The company’s decision to explore this sector reflects the growing demand for natural gas as a key energy source for data centers, which are increasingly seen as central to powering artificial intelligence and other data-driven technologies. Last week, Meta announced a new $10 billion data center in Richland Parish, Louisiana, to be powered by three combined-cycle combustion turbines with a capacity of 2.26GW, built and operated by Entergy Louisiana. Meanwhile, S&P Global forecasts that natural gas demand for data centers could range from 3 billion cubic feet per day (bcf/d) to as high as 6 bcf/d by 2030.
Natural gas is now considered a critical bridging solution in the shift toward low-carbon energy, with growing recognition that its role may be essential in meeting the near-term needs of high-energy-demand facilities like data centers. Last month, Midcontinent Independent System Operator (MISO) president Clair Moeller pointed out that data centers could pay for gas-fired generation as a short-term solution to meet their power needs.
However, despite this potential, there are concerns about whether even substantial natural gas expansion will be sufficient to meet the rapidly rising demand for data center energy. A recent report from Virginia’s Joint Legislative Audit and Review Commission warned that to accommodate unchecked growth in the sector, the state would need to build a new 1.5GW natural gas plant every two years for the next 15 years—matching the busiest growth period of the last decade.
This marks Exxon’s first major move into power generation, although the company has already made strides in the data center sector. Earlier this year, Exxon teamed up with Intel to develop advanced liquid-liquid cooling technologies for data centers. In October 2023, Exxon also introduced a new range of synthetic and non-synthetic cooling fluids for data centers, further expanding its offerings in this space.
