LandBridge and NRG Announce Strategic Agreement to Explore Development of a Major Data Center and Power Facility in the Delaware Basin
LandBridge Company LLC (NYSE: LB) (“LandBridge”) has announced that it has entered into a strategic agreement with NRG Energy, Inc. (“NRG”), marking a significant step toward the development of new digital and energy infrastructure in West Texas. The collaboration focuses on the potential development of a large-scale data center site in Reeves County, Texas, located in the heart of the Delaware Basin.
The proposed site, if fully realized, could house a massive 1,100-megawatt (MW) grid-connected natural gas power generation facility. NRG, a leading independent power producer in the United States, would be responsible for constructing the facility. However, this project is contingent on securing an appropriate long-term power purchase agreement (PPA) with a data center operator. Such a PPA would serve as the financial foundation necessary to move forward with construction and ensure reliable electricity delivery to the energy-intensive computing operations of a data center.
Laying the Groundwork for 2029 Operations
LandBridge and NRG have already begun the early groundwork to position the project for success. Initial applications for air permits and electric interconnection requests have been filed. These early regulatory steps are crucial in preparing the site for construction and eventual operations. If approvals are obtained and development proceeds as envisioned, the power generation facility and accompanying data center infrastructure could be operational by the end of 2029.
The timing aligns with the expected surge in demand for energy to support data centers and other digital infrastructure across the United States. With artificial intelligence, cloud computing, and high-performance computing workloads expanding rapidly, operators are actively seeking locations with both access to reliable, large-scale power and proximity to existing transmission networks.
A Strategic Location Near the Waha Hub
One of the project’s most notable advantages is its location. LandBridge’s surface acreage sits adjacent to the Waha natural gas market hub in the Delaware Basin, one of the most prolific oil and gas producing regions in the United States. The site offers direct access to abundant, low-cost natural gas supplies and existing transmission infrastructure.
This unique positioning provides a dual benefit. First, the availability of inexpensive natural gas can ensure a competitive and stable cost of energy production. Second, the presence of transmission infrastructure in the region allows for more efficient integration of the facility into the broader Texas electric grid. Together, these factors create an attractive value proposition for both energy producers and digital infrastructure developers.
Jason Long, Chief Executive Officer of LandBridge, emphasized this strategic advantage in his comments. “NRG’s selection of this site for potential development of critical power generation supported by a data center project marks an exciting step forward for both LandBridge and the entire Delaware Basin,” Long said. “The collaboration further advances our powered land strategy and highlights the compelling value that LandBridge offers to blue-chip power generators, and to developers of digital infrastructure, particularly data centers.”
Meeting the Rising Power Demands of Data Centers
Data centers are among the fastest-growing consumers of electricity worldwide, driven by the exponential growth of digital services, cloud storage, and artificial intelligence. According to recent industry analyses, the U.S. data center industry alone consumes tens of thousands of megawatts of electricity annually, and demand is projected to continue rising sharply in the coming decade.
By targeting a 1,100 MW facility, the LandBridge–NRG partnership is positioning itself to support hyperscale data center operations capable of hosting enormous computing power. Such a development would not only provide reliable energy for data-intensive industries but also enhance grid stability in West Texas by anchoring new natural gas-based generation in a region rich with energy resources.
Robert J. Gaudette, Executive Vice President and President of NRG Business and Wholesale Operations, underscored the importance of this initiative for the local region. “We are pleased to explore bringing reliable energy solutions to West Texas,” Gaudette said. “Once anchored by a long-term customer, the site has the potential to foster innovation and support data center growth, economic resilience, and grid stability in the region.”
Economic and Regional Implications
If the project moves forward, it is expected to generate significant economic benefits for Reeves County and the broader Delaware Basin. Large-scale infrastructure projects typically bring hundreds of construction jobs during the building phase and ongoing operations roles once facilities are online. Furthermore, the presence of a data center in the area could attract additional investment from technology companies, service providers, and related industries.
The Delaware Basin has long been known for its role in the oil and gas industry. However, projects like this one reflect a growing trend of diversifying the region’s economic base to include digital infrastructure and energy innovation. By leveraging its natural resource advantages and expanding into power generation tied to high-growth industries, the region may position itself as a hub not only for traditional energy but also for the digital economy of the future.
Aligning Energy and Technology Strategies
For LandBridge, this agreement with NRG builds upon its broader strategy of unlocking value from its extensive surface acreage holdings. The company’s “powered land strategy” emphasizes partnerships with energy providers and digital infrastructure developers to transform land assets into hubs of energy and technology activity.
For NRG, the project offers a pathway to expand its footprint in natural gas generation while aligning with the rapidly evolving needs of data center operators. The combination of reliable natural gas power with large-scale data infrastructure highlights the convergence of traditional energy and next-generation digital industries.
