Gas-Rich Australian Region Backs $28 Billion Data Center Project

Australia’s Northern Territory has granted land to a major data center project that claims it could attract A$40 billion ($28 billion) in private investment.

The region’s government awarded 185 hectares (457 acres) of land to Beetaloo Digital Pty Ltd., a unit of natural gas company Beetaloo Energy Australia Ltd., to develop two “hyper-scale” AI data center campuses, it said in a statement Wednesday. The company plans to build up to 2 gigawatts of power generation for the sites, using fuel from a massive shale gas deposit that is set to start commercial production this year.

The artificial intelligence boom is threatening to strain grids and water resources around the world. Power demand from data centers is poised to surge in Australia over the next quarter-century, risking an increase in emissions from electricity generation after years of declines.

Beetaloo Energy shares jumped as much as 20% in Sydney. The company is in talks with potential partners to develop the greenfield site, which is near Darwin’s existing subsea cables that offer hyperscale operators direct links to markets in the Asia-Pacific region, it said in a regulatory filing.

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“Data center proponents are looking to the Territory because of the promise of reliable and affordable Beetaloo gas-to-power supported by renewables, and because of how close and connected we are to major Asian markets and digital superpowers,” Chief Minister Lia Finocchiaro said in the government statement.

Hydraulic fracturing in the Beetaloo Basin could boost Australia’s emissions by as much as 20%, and the impacts of data centers and fracking on the region’s climate and scarce water supplies need to be considered, Environment Centre NT said.

“The Northern Territory is forecast to become unlivable due to climate change within a couple of generations, yet new data shows the Territory’s annual greenhouse gas emissions are skyrocketing,” the group said in a statement.