Prometheus Hyperscale and Istmo Energy have announced a joint development agreement to build a hyperscale data center campus in Reeves County, Texas, with an initial phase designed to deliver 1.5 gigawatts of compute capacity and a defined expansion path to 2.5 gigawatts.

A Dual-Fuel Campus Built to Bypass the Grid

The Pecos campus, as the project is named, is designed to operate entirely behind the meter, meaning it will generate its own power on-site rather than drawing from the public electricity grid.

This architecture is central to the partnership's proposition: by avoiding dependence on grid interconnection or transmission upgrades, the developers say they can compress the timeline between customer commitment and operational compute capacity.

Power will be generated from two fuel sources. The first is pipeline natural gas, a conventional choice for behind-the-meter data center generation.

The second is ethane sourced directly from Istmo Midstream's co-located fractionation facility on the same site.

This dual-fuel configuration is described by the partners as providing an additional layer of fuel security by reducing dependence on any single fuel source or supply pathway. Alex Gutierrez, CEO of Istmo, characterized the arrangement as an industry first.

"By pairing behind-the-meter generation directly with our co-located fractionation assets, we are delivering a unique and unprecedented dual-fuel capability in behind-the-meter data centers," Gutierrez said.

"Seamlessly integrating on-site ethane supply alongside pipeline natural gas eliminates single-point fuel risks, insulates compute from grid constraints and curtailments, and establishes a new benchmark for uptime and operational resilience in hyperscale infrastructure."

The companies noted that future tenant-directed grid connectivity remains an option, though it is not a requirement of the campus design.

Construction Timeline and Facility Design

First power at the Pecos campus is targeted for 2027, using modular data center construction methods.

The partners also indicated an option to combine modular construction with custom-built facilities beginning in 2028.

On the cooling side, the campus will use a closed-loop system that recirculates the same cooling solution internally.

The companies stated that this approach is not evaporative and does not draw from or discharge to local water supplies, a consideration of particular relevance in West Texas, where water availability is a persistent regional concern.

Trevor Neilson, President of Prometheus Hyperscale, framed the Pecos project within his company's broader strategic direction.

"The Pecos Project and partnership with Istmo Energy add 2.5GW to our existing project pipeline and advance our vision of developing scalable infrastructure for the age of AI," Neilson said.

"It demonstrates the strength of our energy-first approach: starting with reliable, redundant power and building from there to deliver speed, scale, and flexibility for hyperscale customers."

Prometheus Hyperscale's Growing Pipeline

The Reeves County project represents one of several developments in Prometheus Hyperscale's current portfolio. According to the company, its multi-gigawatt pipeline also includes projects in Evanston, Wyoming, Casper, Wyoming, and Kaufman County, Texas.

The addition of the Pecos campus brings the company's stated pipeline to a combined capacity of 2.5 gigawatts for this project alone.

The company describes itself as led by seasoned energy executives and deeply experienced data center developers, with an energy-first, behind-the-meter native approach underpinning its development strategy.

In its public statements, Prometheus Hyperscale also outlined community commitments it applies across its projects, including prioritizing local workers, making long-term community investments, maintaining responsible operations, and engaging in transparent partnerships with host communities.

Istmo Energy's Integrated Infrastructure Model

Istmo Energy describes itself as an integrated energy infrastructure and midstream development company focused on next-generation power solutions for critical computing.

Its business model centers on co-locating fuel processing and fractionation assets with dedicated power generation to create utility-independent, behind-the-meter power platforms.

The company states its focus is on the Permian Basin, the prolific oil and gas-producing region that spans West Texas and southeastern New Mexico, making Reeves County a geographically consistent fit for Istmo's existing midstream operations.

The ethane that will serve as the campus's secondary fuel source comes from Istmo Midstream's fractionation facility situated on the same site as the planned data center campus, eliminating the need for external fuel transport infrastructure for that fuel stream.

Gutierrez pointed to power availability as the central constraint shaping the current landscape for artificial intelligence infrastructure deployment. "Power availability and long-term reliability have become the primary bottlenecks for the AI transition," he said.

Market Context for the Announcement

The announcement reflects a broader trend in data center development toward securing dedicated, on-site power generation in response to surging demand from artificial intelligence workloads.

Grid interconnection queues in major electricity markets have grown substantially in recent years, creating long delays between project approval and operational status.

Behind-the-meter generation strategies have emerged as one response to these constraints, allowing developers to bring capacity online without waiting for grid infrastructure upgrades.

The Pecos campus's location in West Texas places it within the Permian Basin, a region with extensive natural gas and natural gas liquids production infrastructure, providing ready access to both pipeline gas and ethane supply.

The area also offers the large land footprints that hyperscale data center campuses require.

The partnership was announced on August 20, 2026.