Oracle's Force Majeure Notice Exposes Permitting Risk on $Multibillion NM Data Center
Oracle issued a force majeure notice Sept. 24 on its Project Jupiter data center campus near Santa Teresa, New Mexico, as permitting delays stack up on the power infrastructure meant to serve the site, Engineering News-Record reports.
Market Impact
The notice, sent to Blue Owl Capital as owner of developer STACK Infrastructure, is meant to preserve Oracle’s contractual protections if the campus doesn’t come online as planned in 2028, according to Bloomberg reporting cited by ENR. Oracle Vice President Michael Egbert told ENR the project “remains on our planned schedule” and that force majeure notices are common on developments of this scale, used to preserve contractual rights rather than signal delay.
Two pieces of the project’s power plan remain stuck in regulatory review. Yucca Growth Infrastructure applied in April for a state permit to build a 2,462-MW Bloom Energy fuel-cell microgrid, with up to 2,275 fuel-cell clusters providing all base-load and backup power for the campus. The New Mexico Environment Department has until Nov. 23 to rule on that permit after a state Supreme Court stay was lifted Sept. 17. A June technical review already found the microgrid would not cause air-quality exceedances. Separately, Transwestern Pipeline Co.’s proposed 17.77-mile Green Chile natural-gas line, needed to fuel the microgrid, has pushed its in-service date from August to February 2027, according to an August FERC filing cited by Source New Mexico. FERC has not yet authorized construction. At a July hearing, Yucca attorney Jennifer Bradfute said her client stood to lose $325 million per month starting in November without faster permit action. Oracle’s workforce data show more than 3,600 construction workers on site, including over 1,000 New Mexico residents, with 900 joining in August and total labor now at about 2.8 million hours.
What It Means for Subcontractors
- Review force majeure notice language in your own Project Jupiter subcontracts now: STACK, Blue Owl, and Oracle say the notice does not change financial commitments, but subs on schedule-sensitive packages should confirm in writing that payment terms and completion dates remain unaffected.
- Track the Nov. 23 deadline for New Mexico Environment Department action on the Yucca/Bloom Energy fuel-cell microgrid permit; electrical and mechanical subs tied to microgrid tie-in work should hold schedule flexibility past that date given the permit’s history of stays and litigation.
- Watch Transwestern’s February 2027 in-service target for the Green Chile pipeline; pipefitting, HDD, and civil crews on the 17.77-mile Doña Ana County line should confirm current construction authorization status with FERC before mobilizing, since federal approval has not yet been issued.
- Document any gap between Oracle’s stated 2028 delivery schedule and the microgrid filing’s conflicting completion dates (November 2029 build-out vs. an October 2026 startup reference); subs on power-dependent scopes should price contingency for a delayed energization date.
- If working through Energy Transfer on the pipeline’s New Mexico state trust land right-of-way, confirm current status directly with the company; the State Land Office canceled prior applications in March and denied reconsideration July 14, and Energy Transfer has not disclosed a revised path or timeline.
