The New Mexico State Land Office has denied Energy Transfer’s request to build a segment of a natural gas pipeline intended to supply power plants for the proposed BorderPlex Digital Assets’ Project Jupiter data center in southern New Mexico, according to a news report.

The decision blocks construction on 0.63 miles of state trust land in Doña Ana County, forcing the developer to pursue an alternative route.

The proposed USD 60m “Green Chile Project” would transport up to 400,000 dekatherms of natural gas per day from El Paso to private power plants designed to fuel Project Jupiter. State land officials said approving the application was not in the best interest of the state trust.

The denial comes as Project Jupiter faces ongoing regulatory scrutiny, including delayed air‑quality permits for gas‑fired microgrids, proposed state legislation to regulate large data‑center microgrids, and public opposition tied to emissions, water use, and infrastructure impacts.

Energy Transfer said the pipeline remains in the planning stage and that the final route will be determined through the federal review process.

The project is backed by Oracle and OpenAI as part of the Stargate initiative.