Net Power Says It Is Focusing on Gas to Ride Data Center Demand

Net Power Inc said it is prioritizing unabated natural gas generation in near-term investment to capitalize on rising demand from artificial intelligence infrastructure.

The development-stage company, based in Houston, Texas, has indefinitely shelved its Oxy-Combustion Cycle or Allam-Fetvedt Cycle technology, a patented power generation system designed to produce reliable electricity from natural gas while capturing virtually all atmospheric emissions. 

Instead it is pursuing a gas-fired generation project in West Texas with an expected capacity of one gigawatt, which would be built in phases.

"We've spent the last four months in an intensive customer engagement and marketing process. We believe that process has given us a clear read on what the market will buy today, and we are focusing the business accordingly", chief executive Danny Rice said in an online statement for Net Power's quarterly results.

"Our commercial strategy is recalibrated around what we believe today's power customers are actually prioritizing: speed-to-power, reliability and scale. Natural gas power generation, co-located with customer load and deployable on a fast timeline, is how we expect to meet that demand today. 

"We continue to believe carbon capture and sequestration will play an integral role in the future of natural gas power, and our approach preserves that pathway, adding carbon capture in future phases as customer requirements, economics and financing support it.

"We anticipate this flexibility will enable us to capture near-term demand now while holding onto the long-term decarbonization opportunity we've always believed in".

Net Power's current venture, phase 1 of Project Permian, had been targeted to reach a final investment decision this year. Net power said in a separate regulatory filing for its quarterly results it no longer expects to make that decision this year and it has not set a timeline for start-up.

"Net Power continues to advance commercial discussions with prospective power offtakers directly and with the support of its financial advisor for Project Permian and other sites", it said in the statement. "Net Power has already contracted two modular gas turbine generator sets with nominal gross power of approximately 68 megawatts for use at Project Permian and is actively evaluating the acquisition of additional gas power units for the project".  

The project site has been leased from Occidental Petroleum Corp, an investor in Net Power.

Net Power had $312.91 million in current assets including $117.93 million in cash and cash equivalents at the end of the second quarter. Current liabilities totaled $17.58 million.

"The Company believes it has the ability to manage its operating costs such that its existing liquidity will be sufficient to fund its obligations for the next 12 months", the statement said.

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