Which sites will benefit from CIFR's 2.5GW gas pipeline?

Cipher Digital’s stock price popped 14% today on news that the BTC miner-turned-data center developer is building lateral pipelines to support 2.5 GW of on-site generation at sites across Texas.

The announcement comes as data center operators in the state — including Cipher Digital — await interconnection approval and base load consideration for 2027/2028 under ERCOT’s Batch Zero load study process.

CEO Tyler Page said on the company’s earnings call that the company was working on behind-the-meter structures to expedite projects for tenants that want power in 2027, and today’s announcement underscores that effort. Cipher plans to work with power providers for the on-site generation, and it ultimately wants to connect this capacity to the grid.

Cipher did not announce how much the project would cost, which pipeline(s) or company it would tap for the gas, or even which sites will benefit from the buildout. But Cipher’s near-term expansion may give us a few hints.

In its August company presentation, Cipher said that it submitted its Colchis (1 GW), McLennan (500 MW), and Mikeska (500 MW) sites for inclusion in Batch Zero, describing each as “expected to be included in Batch Zero.”

These three sites are the only near-ish-term plans for Cipher, with everything else — Apollo (900 MW), Barber Lake expansion (500 MW), Milsing (500 MW), and Stingray (200 MW) — projected at 2030+ on its pipeline capacity timeline.

If I were a betting man, I’d place my chips on these three sites, as being the clearest beneficiaries of this plan, with the addition of Barber Lake as another possibility. (Incidentally, these four add up to 2.5 GW of load).

Mikeska, for one, sits in McCulloch County, which is a pipeline alley that includes the Matterhorn Express Pipeline and Energy Transfer’s NET South system, among others. In Tom Green County, Colchis also has its pick from Matterhorn, Energy Transfer, and many others. Finally, the McLennan site’s eponymous county is host to Energy Transfer and Atmos pipelines, among others.

Charlie said on the stream today that he wouldn’t be surprised if Energy Transfer furnished the gas for the project, and given Cipher’s site locations, the evidence is strong in favor of this outcome.

Goign further, we can’t totally rule out Barber Lake, situated as it is in the Permian Basin and seeing as Cipher has it earmarked for a 500 MW expansion sometime in or after 2030 — and more importantly, since Cipher revealed in its February business update that it has signed an MOU for this expansion.

Now, with that speculation out of the way, we have plenty of other questions to ask. How long will the approval process take for the laterals — is Cipher already ahead here? — and does Cipher already have turbines and other equipment secured? Who is the power partner, and how long will it take to construct generation across the sites?

-CMH

Today, we break down Cipher Digital’s plan to build 2.5 GW of gas pipelines to expedite its data center buildouts, including which sites will most likely benefit from the behind-the-meter generation. We also cover IREN’s latest $2.8B GPU financing round, whether or not the AI bottleneck trade is dead, and Nscale’s reported $103B in contract backlogs ahead of its September IPO. Plus, Senator Bernie Sanders has proposed a cap on AI intelligence to keep it below human IQ.

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The Information reported Wednesday that the London-based neocloud could pursue a US initial public offering as soon as September after showing investors the fresh revenue.

The total has more than doubled from $51 billion before the Anthropic agreement, helped by additional contracts with other AI-native customers. Nscale’s signed commitments have an average duration of 5.7 years, equivalent to about $18 billion annually across the portfolio, per The Information. Read more.

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The Independence City Council approved a 90% abatement on eligible property and equipment for the project in a 5-2 vote on March 2. Perkins was among the five supporting council members. Read more.

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