A Delayed Pipeline Just Put Bloom Energy's Role in a $165 Billion AI Project in Question

Natural gas pipeline giant Energy Transfer (NYSE:ET) had to postpone the in-service date of its planned Green Chile project due to permitting issues. That project has direct implications for Bloom Energy (NYSE:BE). The fuel cell maker is supplying power equipment to Oracle (NYSE:ORCL) and its massive Project Jupiter, an up to 2.5-gigawatt AI data center in New Mexico. The natural gas supplied by that pipeline would have powered the massive data center complex through Bloom Energy's fuel cells.

However, Bloomberg recently reported that Oracle issued a force majeure notice to the project's developer, Stack Infrastructure, a unit of Blue Owl Capital (NYSE:OWL), to protect itself from potential cost increases resulting from the delay. While Oracle remains committed to the $165 billion project, it puts in question when Bloom Energy will deliver these fuel cells.

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A delayed pipeline is causing a force majeure

Last month, Energy Transfer delayed the expected in-service date for its Green Chili Project from Aug. 15 to Feb. 1, 2027. It had to push back the project due to denials from the New Mexico State Land Office for right-of-way permits across state trust lands, following opposition from local environmental groups. The 17-mile pipeline would connect the company's Transwestern Pipeline to the data center complex, providing it with 400 million cubic feet of natural gas per day. Bloom Energy's fuel cells can't operate without gas from that pipeline, leaving Oracle's massive data center campus project without the power it needs.

Oracle initially chose Bloom Energy's fuel cells to power this project because they solved several key issues. They're much faster to deploy than grid power and gas turbines. They're also much more environmentally friendly. They generate power electrochemically, which requires less water, a critical advantage in a state like New Mexico.

Oracle previously warned regulators that "time is of the essence" and that a delay could put the entire project in jeopardy. It's now issuing a force majeure notice to Blue Owl, aiming to delay payments if the project doesn't come online in 2028 as planned.

How this might impact Bloom Energy

Oracle initially partnered with Bloom Energy in July 2025 to deliver on-site power to a data center within 90 days. Bloom ended up deploying that fully operational fuel cell system in just 55 days. That led Oracle to expand its strategic partnership to deploy up to 2.8 GW of fuel cells to accelerate AI infrastructure build-out.

Project Jupiter is a meaningful percentage of that partnership. Oracle initially contracted 1.2 GW of capacity, which Bloom expected to deploy within the next year.

However, the delay and the force majeure won't necessarily slow Bloom Energy down. Founder and CEO K.R. Sridhar discussed the potential impact of project delays on the second-quarter conference call. He noted that the company's 2026 guidance isn't dependent on a single project. The company fully expects that some projects will be delayed, while new ones will absorb the shortfall. It has the flexibility to deploy its exact-copy equipment across various customer projects. Further, its contracts include strong protections. These factors limit the risk of project delays impacting its financial results.

Down despite what seems like a non-issue

Shares of Bloom Energy slumped on news that Oracle was declaring a force majeure due to delays in its massive Project Jupiter. However, this issue doesn't appear likely to affect the fuel cell maker. Oracle remains committed to the project. Further, Bloom Energy has the flexibility to deploy this equipment at other customer projects. As a result, the sell-off appears to be a good buying opportunity for long-term investors. While investors should monitor the pipeline situation, it doesn't look as though it will be thesis-altering for the hydrogen stock.

Matt DiLallo has positions in Bloom Energy and Energy Transfer and has the following options: short October 2026 $150 puts on Bloom Energy. The Motley Fool has positions in and recommends Bloom Energy and Oracle. The Motley Fool has a disclosure policy.