Net Power Buys 123 MW of Equipment to Push Project Permian Toward 200 MW
The procurement agreement brings the development-stage company's first West Texas plant closer to commercial scale as AI data center demand draws capital to the basin.
Net Power Inc. said on Monday (2026-08-24) it had signed an agreement to purchase 123 megawatts of new generation equipment, lifting potential capacity for the first phase of Project Permian to nearly 200 megawatts. The Houston-based company remains in the development stage. No commercial-scale plant has been built.5
Rigzone reported on August 17 (2026-08-17) that Net Power is prioritizing unabated natural gas generation in near-term investment to capitalize on AI infrastructure growth. The logic is straightforward enough: Permian gas is cheap, data center demand in West Texas is growing, and on-site generation avoids the pipeline bottlenecks that have repeatedly pushed Waha hub prices below zero. But Monday's (2026-08-24) announcement is an equipment procurement step, nothing more. Construction financing, permitting, and offtake contracts all still lie ahead before a single megawatt-hour reaches the grid.5,3
The gas supply backdrop is substantial. EIA data published on June 18 (2026-06-18) show marketed natural gas production in the Permian reached 27.6 billion cubic feet per day in 2025, a 60% increase from 17.2 Bcf/d in 2021 — growth that outpaced crude oil output, which rose 39% over the same period to 6.6 million barrels per day.1
Rising gas-oil ratios are driving a disproportionate share of that output. The Permian's average gas-oil ratio reached nearly 4,200 cubic feet of gas per barrel in 2025, up from 3,628 cubic feet per barrel in 2021, EIA data show. Had the ratio held flat, production would have reached only 23.8 Bcf/d in 2025 — 14% below actual output.1
Getting that gas to market is where the chronic constraint sits. RBAC analysis of basin pipeline projects shows that limited Permian takeaway capacity has repeatedly contributed to negative Waha prices when production outstrips available pipe. On-site generation consumes gas without requiring interstate clearance, which is part of Net Power's commercial pitch. But additional takeaway projects that RBAC identifies for 2026 are in development, and if built they would ease Waha congestion and compress the local supply discount that makes stranded-gas power generation so attractive.3
NYMEX Henry Hub front-month was sitting at $2.79 per million British thermal units as of Tuesday (2026-08-25) — a price level supportive of gas-fired generation broadly. The Waha-Henry Hub basis, though, can swing sharply during congestion periods, cutting both ways for a developer whose feedstock cost advantage is partly a function of local dislocation.3
The demand side has demonstrated genuine scale. Chevron announced on Monday (2026-06-22) a 20-year deal to supply electricity to a Microsoft data center in West Texas, with plans to build 2.67 gigawatts of generation capacity in the region. That single offtake agreement is roughly 13 times the capacity Net Power is targeting for its first phase, which illustrates both the size of the addressable market and the distance Net Power has yet to travel to compete at comparable scale.2
Midstream infrastructure is keeping pace. Brazos Midstream said on Monday (2026-08-10) it will build a 300 million cubic foot per day cryogenic processing plant — Cassidy 2 — in Glasscock County, Texas, with start-up targeted for summer 2027, bringing its Midland Basin processing capacity to 1.1 billion cubic feet per day. More processed gas entering the regional supply pool deepens the feedstock base any Permian power developer would draw from.4
For Net Power, equipment procurement is the earliest of many gates. Commercial financing, offtake contracts, and regulatory permits still separate Monday's (2026-08-24) announcement from a plant producing power for the grid. The company will need to clear each of those hurdles at nearly 200 megawatts of scale before Project Permian moves beyond a development-stage proposal — in a basin where gas production has been growing faster than the infrastructure built to absorb it, and where new takeaway capacity, if it arrives, could erode the very supply dislocation underpinning the project's economics.5,3,1