Two Force Majeure Notices in 24 Hours Expose Cracks in America's Natural Gas Pipeline Network

Two separate natural gas pipeline problems hit markets within a day of each other this week, and neither one is connected to the other. Together they show how fragile the plumbing behind America's gas supply, and now its AI data center buildout, actually is.

West Virginia: A Mechanical Failure Spikes Gas Futures

TC Energy's Columbia Gas Transmission system, known as TCO, declared force majeure Thursday morning on its Mountaineer XPress pipeline in West Virginia, according to ZeroHedge, citing an update from natural gas research firm Criterion Research. The company ordered an immediate pressure reduction on Line 100 between the Mt. Olive Compressor Station in Jackson County and the Saunders Creek Regulator Station in Cabell County, blaming an unexpected mechanical issue.

TCO is cutting a key capacity constraint, called MXPSEG MA42, to zero starting with the September 25 trading cycle. That affects roughly 1.8 million dekatherms per day of firm service, according to Criterion Research, which is almost the entire 1.88 million dekatherms currently scheduled through that segment.

Mountaineer XPress is a 2.7 billion cubic feet per day system that carries Marcellus and Utica shale gas south through West Virginia into Columbia's broader network, feeding both regional markets in the Northeast and Midwest and southern connections that reach export terminals on the Gulf Coast. As of Thursday, upstream production points like Sherwood, Corral and Viking had not meaningfully cut output, but the restriction is expected to show up fully in Friday's nomination cycle.

TCO has not given a restoration timeline and said it would issue another update Friday morning. October natural gas futures on Nymex jumped 4.5%, or 13.6 cents, to $3.159 per million British thermal units by 11 a.m. ET Thursday. Prices are up more than 12% since early Wednesday.

New Mexico: Permitting Delays Trigger a Different Force Majeure

The second story involves Oracle, not a gas producer, and a completely different pipeline. Bloomberg reported, and multiple outlets including The Next Web and BigGo Finance confirmed, that Oracle sent a force majeure notice to Stack Infrastructure and BorderPlex Digital Assets, a unit of Blue Owl Capital, over delays at Project Jupiter, a planned AI data center campus in Doña Ana County, New Mexico.

Project Jupiter is part of the Stargate initiative backed by OpenAI and SoftBank, with a price tag that could reach $165 billion and financing of roughly $18 billion involving about 20 banks, according to BigGo Finance. Related project debt has already traded down to 89 to 91 cents on the dollar. The campus is designed to run on up to 2.45 gigawatts of Bloom Energy fuel cells, which need natural gas to operate.

That gas was supposed to come from Energy Transfer's Green Chile pipeline, a roughly 17-mile line connecting the company's Transwestern Pipeline to the site with 400 million cubic feet per day of capacity, according to The Motley Fool. The New Mexico State Land Office rejected rights-of-way for the pipeline across state trust lands in March and again in July, with Land Commissioner Stephanie Garcia Richard citing emissions concerns and strain on local water and other resources, according to The Next Web. That's a legitimate environmental objection from an elected state official, not a fringe complaint, and it's worth taking at face value even as it collided with a $165 billion project on a tight timeline.

Energy Transfer rerouted the pipeline across federal land and pushed its in-service date from August 15 to February 1, 2027. The New Mexico Supreme Court lifted a stay on the permitting fight on September 17, according to BigGo Finance. Oracle had previously told regulators that "time is of the essence" and that further delay could jeopardize the project.

Oracle's force majeure notice isn't an exit. According to Bloomberg's reporting, Oracle wants the right to delay payments if the campus doesn't open on schedule in 2028, not to walk away as anchor tenant. An Oracle spokesperson told BigGo Finance that "Project Jupiter remains on track, and our commitment to New Mexico is unwavering," while declining to discuss the notice directly and saying only that the company is "rethinking" its power strategy. Blue Owl Capital declined to comment on the notice itself but said afterward that it does not change the firm's financial commitment to the project.

Market Reaction

Oracle shares fell as much as 4% in premarket trading, according to BigGo Finance, dragging down Blue Owl Capital in sympathy. Bloom Energy took the hardest hit. BigGo Finance put the drop at 4.4%, while Trading Key reported Bloom shares down 6.17% by 2:15 p.m. Thursday, underperforming an industrial goods sector that was down just 0.43% overall.

Trading Key also flagged that Bloom Energy's selloff was compounded by executive share sales under pre-arranged trading plans and what it described as "ongoing legal scrutiny around supply chain disclosures ahead of an upcoming lead-plaintiff deadline." No lawsuit outcome or regulatory finding has been reported, and this should be read as a pending legal process, not a proven claim of wrongdoing. S&P downgraded Oracle's credit rating to BBB- in July, according to BigGo Finance, adding another layer of pressure on a stock already down sharply from its 52-week high of $322.54 to around $139 as of Thursday.

Neither pipeline failure caused the other. Both landed the same week, and both make the same point: whether it's a compressor station in Cabell County or a state land office in Santa Fe, the physical and regulatory bottlenecks in gas infrastructure are now market-moving events for everyone from Appalachian gas traders to Oracle shareholders. TCO's next update is expected Friday morning. New Mexico's permitting fight, now cleared by the state Supreme Court to proceed, still has to produce an actual right-of-way before Energy Transfer's rerouted pipeline can hit its new February 2027 target.