U.S.-based Kodiak Gas Services has announced a six-year contract to supply 76 MW of natural gas-fired power to a data center in West Texas. The facility is reported to be leased by an investment-grade hyperscaler, and the agreement marks Kodiak’s second long-term data center power supply contract.
The power will be supplied on a behind-the-meter basis, with approximately 40 reciprocating gas engine generators reported to be deployed. Deployment is set to begin in the fourth quarter of 2026, with capacity expanding to full scale by the first quarter of 2027. Including this contract, Kodiak is reported to be targeting a total of 2 GW of generation capacity supplied to data center and other customers by 2030.
The supplied generation capacity is 76 MW, with a contract term of six years. Approximately 40 reciprocating gas engine generators will be deployed, with initial deployment beginning in the fourth quarter of 2026 and full capacity expansion targeted for completion by the first quarter of 2027. The company’s medium-to-long-term target is 2 GW by 2030.
This contract is seen as an example of the rapid spread within the U.S. of behind-the-meter power supply, deploying gas generation equipment directly on-site rather than waiting for new grid interconnection, in response to surging data center power demand driven by growing artificial intelligence (AI) computing needs. Kodiak is reported to have historically focused on gas compression services, and this contract reflects the company’s expansion into the data center power supply market.
This contract is seen as an example illustrating how reciprocating gas engine-based, rapidly deployable generation equipment is emerging as an alternative for data center power supply amid lengthening wait times for new grid interconnection in the United States. While large gas turbine-based CCGT (combined-cycle) projects are reported to take several years for design, permitting and equipment procurement, reciprocating gas engines can be deployed in a relatively short timeframe, making them well-suited to hyperscalers’ urgent power procurement needs. Against this backdrop, more existing gas infrastructure service companies like Kodiak may expand into the power generation business, and contract opportunities for reciprocating gas engine manufacturers are also expected to grow accordingly. However, how the spread of such behind-the-meter gas generation will be coordinated with regional grid planning and carbon emission targets over the longer term remains a key industry concern.
Whether the initial deployment is completed in the fourth quarter of 2026 and whether full capacity expansion is completed by the first quarter of 2027 as targeted are the first points to confirm. It is also worth watching how quickly Kodiak signs additional data center power supply contracts toward its 2 GW target by 2030. Whether reciprocating gas engine manufacturers see expanded order volumes, and how regional grid operators and regulators respond to the spread of behind-the-meter generation, both warrant further confirmation.