According to Zhitong Finance APP, Oracle (ORCL.US) is adopting a novel power supply strategy—delivering natural gas directly to server campuses by truck—to ensure multiple data center projects stay on schedule.

People familiar with the matter said that while Oracle waits for natural gas pipelines to be built and connected to related equipment, trucking natural gas has helped a data center in a Salt Lake City suburb continue operating for more than a year.

One of the people said the company is also using this method at a campus it is building for OpenAI in Shackelford County, Texas, to advance early-stage construction work.

People with knowledge of the project said Oracle is currently considering using the same strategy in New Mexico, where delays to a natural gas pipeline project originally intended to power one of Oracle's most important data centers are threatening the project's timeline.

People familiar with the matter said that by trucking compressed natural gas (CNG) to the data center known as "Project Jupiter," Oracle can bring the project's initial portion online before the pipeline officially begins operations.

The plan is significant. Last month, Oracle sent a force majeure notice to the developer of the New Mexico project. If the project is further delayed, the notice could exempt the company from paying some amounts.

Power supply has become a major bottleneck in the artificial intelligence (AI) data center boom. Many large server campus projects are adopting on-site power plants that burn natural gas to provide electricity.

Typically, natural gas needs to be transported through pipelines, and the design and construction of pipelines can take months. Regulatory actions can also cause pipeline project delays.

In New Mexico, pipeline operator Energy Transfer (ET.US) had to reroute a pipeline that will ultimately supply Oracle's data center after state regulators rejected a proposed route. This pushed the pipeline company's target in-service date from this summer to next year.

Because it is difficult to secure natural gas supply quickly, a group of companies specializing in natural gas compression and trucking have seized on the boom among data center developers eager to start computing capacity supply as soon as possible. These companies include Certarus, a unit of Superior Plus Corp., and VoltaGrid LLC.

They are aggressively promoting so-called "virtual pipeline" services as a transitional power supply solution, helping customers obtain energy supply before natural gas pipelines begin operations. In the Utah data center project, Oracle transports natural gas through Certarus; in Texas, the related services are provided by VoltaGrid.

Oracle wrote on social media: "Special thanks to the VoltaGrid team for finding a cost-effective power supply solution to ensure our customers can get OCI (Oracle Cloud Infrastructure) computing capacity on schedule."

Certarus declined to comment on specific transactions, but the company said that the ever-increasing time required for data centers to obtain pipeline and grid access "is driving growing demand for energy solutions that can be deployed quickly and scaled flexibly."

It is worth noting that trucking compressed natural gas is neither easy nor cheap. Jack Weixel, senior director of energy analysis at East Daley Analytics, said that when labor, specialized equipment, and the fuel costs for the trucks themselves are included, the delivered cost of compressed natural gas is about four times the price of natural gas delivered through major pipeline hubs.

The reason is that natural gas must first be extracted from pipelines, then compressed into trailers, then transported to the site—sometimes taking hours—and finally depressurized before it can supply gas to generators.

Even a relatively small AI data center requires trucks to continuously deliver natural gas throughout the day. High costs and complex operations are part of the reason compressed natural gas has mainly been used in specific industrial operations.

Such operations include mining or oil drilling, which are usually located in remote areas far from grid connection points. Nevertheless, for companies like Oracle, this approach may still be the best stopgap available.

Oracle has invested billions of dollars and staked its reputation on rapidly delivering data centers for customers such as OpenAI. Currently, Oracle's free cash flow is negative, and this condition is expected to continue until more AI data centers are built.

The biggest question is how far this solution can actually scale. Given the size of "Project Jupiter," powering even a small fraction of its total designed capacity would require dozens of truckloads of natural gas per day.

Ellie Holbrook, an energy analyst at SemiAnalysis, said that if Oracle supplied a 100-megawatt power load solely through trucked compressed natural gas—about 4% of the project's eventual total capacity of 2.45 gigawatts—then the natural gas delivered by each large trailer would provide only about 40 minutes of power.