Allstream Insiders Summary
NET Power has signed two agreements intended to support approximately 123 megawatts of additional gas-fired power generation for the first phase of Project Permian in West Texas.
The first is a deposit and exclusivity agreement covering a third party’s engineering, procurement and construction position and associated generation-equipment rights for an approximately 123-MW project. NET Power paid a $20 million deposit that would be credited toward the purchase price if the transaction closes.
NET Power expects closing during the third quarter of 2026, subject to third-party consents, definitive documentation and other closing conditions. The announcement does not disclose the seller, equipment manufacturer, EPC contractor, total purchase price or delivery and installation schedule.
Separately, NET Power entered into a cost-reimbursement agreement with an unidentified prospective customer. The customer may reimburse certain approved and documented third-party costs associated with the proposed acquisition and project development. That agreement does not require the customer to sign an energy-services agreement or purchase power.
If the equipment-rights transaction closes, NET Power says the first phase’s total potential generation capacity would increase to nearly 200 MW. Project Permian has not reached a final investment decision, and NET Power has not announced a binding offtake agreement, project-level financing or a new commercial-operation target.
What Agreements Did NET Power Sign?
NET Power announced two separate commercial arrangements on August 24, 2026. One addresses access to additional generation equipment and an associated EPC position; the other establishes a limited cost-reimbursement framework with a prospective end customer.
Deposit and Exclusivity Agreement
The deposit and exclusivity agreement gives NET Power an exclusive path to acquire contractual and equipment rights associated with an approximately 123-MW gas-fired power project.
NET Power’s August 13 Form 10-Q described the contemplated equipment as reciprocating gas engines and said the transaction also covers a related engineering, procurement and construction contract. At that point, the proposed purchase remained subject to due diligence, third-party consents and definitive agreements.
NET Power has now made a $20 million deposit. If the transaction closes, that amount will be applied toward the purchase price. A portion of the remaining cost would be due at closing, with additional payments tied to equipment manufacturing, delivery and installation milestones.
The company has not disclosed the full purchase price or the detailed provisions governing return or retention of the deposit if the transaction does not close. NET Power’s cautionary statement identifies the potential return or forfeiture of deposits as a transaction risk. The $20 million deposit therefore should not be described as the cost of the 123-MW equipment package or the total Project Permian budget.
Prospective-Customer Cost Reimbursement
The separate reimbursement agreement allows an unidentified prospective customer to reimburse specified, approved and documented third-party costs associated with the proposed equipment acquisition and related development work.
Reimbursement remains subject to the agreement’s procedures and an undisclosed aggregate cap. NET Power said the agreement may also serve as collateral for equipment financing.
The arrangement is not a power-purchase agreement, energy-services contract or binding customer commitment. Either party may decide not to enter into a subsequent energy-services agreement, and the prospective customer is not obligated to purchase electricity from Project Permian.
How Would the 123 MW Change Project Permian Phase I?
NET Power says acquiring the additional rights would bring the first phase’s total potential generation capacity to nearly 200 MW.
The company previously contracted to purchase two modular gas-turbine generator sets with approximately 68 MW of nominal gross power in total for Project Permian Phase I. The newly announced 123-MW position would expand the equipment available for the initial phase if NET Power completes the acquisition and deploys the assets.
The nearly-200-MW figure is company-described potential capacity. It is not operating capacity, a completed construction milestone or capacity committed under a binding customer offtake agreement.
NET Power’s broader concept for Project Permian is a phased power-generation site that could eventually accommodate up to approximately 1 GW. That 1-GW figure is a long-term site-development concept—not the approved size of Phase I—and development beyond the initial phase would require additional land and development rights.
Has Project Permian Reached a Final Investment Decision?
NET Power has not made a final investment decision for Project Permian Phase I. Its second-quarter Form 10-Q says the company no longer expects FID during 2026 and has not established a replacement target for FID or commercial operations.
The company also disclosed that it had not entered into:
- A binding power offtake agreement
- A project-level financing agreement
- Definitive site or land-use arrangements for the contemplated co-located configuration
- Agreements for the sale, transportation or sequestration of captured carbon dioxide
NET Power leases the current Phase I site from an Occidental Petroleum subsidiary. In its August 13 filing, the company said the existing leasehold provided the acreage required for the equipment it had contracted to purchase at that time and for Phase I as then configured. NET Power separately said that a broader buildout or co-located configuration would require additional land and development rights that it had not obtained as of that filing.
The August 24 announcement advances procurement positioning, but it does not report that the remaining commercial, land, permitting, interconnection or financing conditions required for FID have been completed.
Will the Initial Project Include Carbon Capture?
NET Power does not currently expect Project Permian Phase I to include carbon capture. The company has repositioned its near-term strategy around natural gas generation equipment designed to accommodate potential post-combustion carbon capture during later phases.
Any later carbon-capture deployment would depend on customer requirements, technology licensing, financing, permitting and agreements for transporting, using or storing captured carbon dioxide. NET Power has not announced definitive arrangements covering those elements.
The company also said in its second-quarter filing that it has no current plans to resume development of its proprietary Oxy-Combustion Cycle. The August 24 equipment announcement should therefore be described as a gas-fired generation procurement step—not as approval of a carbon-capture power plant.
Project Permian Agreement Tracker
| Item | Current disclosure |
|---|---|
| Project | Project Permian Phase I |
| Location | West Texas |
| New equipment position | Rights associated with approximately 123 MW of gas-fired generation |
| Equipment type | Reciprocating gas engines, according to NET Power’s August 13 Form 10-Q |
| Deposit | $20 million, creditable toward the purchase price at closing |
| Expected closing | Third quarter of 2026, subject to conditions |
| Potential Phase I capacity | Nearly 200 MW if the acquisition closes and equipment is deployed |
| Broader site concept | Phased development potentially accommodating up to approximately 1 GW |
| Customer arrangement | Limited cost-reimbursement agreement with an unidentified prospective customer |
| Power offtake | No binding agreement announced |
| Final investment decision | Not reached; no current target date disclosed |
| Initial carbon capture | Not currently expected |
| Total acquisition and project cost | Not disclosed |
| Seller, manufacturer and EPC contractor | Not disclosed |
What Could the Agreements Mean for the Supply Chain?
Based solely on the disclosed generation configuration—not on announced bid packages—the proposed acquisition and potential deployment could support work involving:
- Reciprocating-engine generation equipment and auxiliary systems
- Engineering, procurement and construction services associated with the transferred EPC position
- Equipment transportation, foundations and mechanical installation
- Natural gas supply, fuel conditioning and related piping
- Switchgear, transformers, controls and electrical interconnection systems
- Cooling, emissions-control and balance-of-plant equipment
- Testing, commissioning and long-term maintenance
NET Power has not identified the third-party seller, equipment manufacturer, EPC contractor or individual suppliers. It also has not announced open solicitations connected with the agreements.
These categories describe work that could be required if the transaction closes and the equipment is deployed at Project Permian. They are not confirmed contract awards or currently available procurement opportunities.
Allstream Insiders Perspective
The two agreements move NET Power closer to controlling additional generation-equipment rights while creating a mechanism through which a prospective customer may reimburse certain approved early costs. The most concrete actions are the $20 million deposit and the exclusive path to acquire rights tied to approximately 123 MW.
The transaction remains conditional. Closing would transfer the disclosed EPC position and associated equipment rights; it would not mean that all equipment had been manufactured or delivered, nor would it by itself establish a binding power customer, complete project financing or authorize construction of the full first phase.
The carbon-capture distinction is equally important. NET Power says it does not currently expect Project Permian Phase I to include carbon capture. Later carbon capture remains a possible configuration subject to commercial and technical agreements that have not been completed.
For the industrial supply chain, the announcement indicates potential future demand for generation equipment, EPC execution and balance-of-plant systems. The timing and availability of that work will depend on transaction closing, project design, land rights, customer commitments, financing and FID.
