Blackstone agreed to buy a natural gas power plant near Pittsburgh for $1 billion, citing soaring demand for electric power from data centers that process artificial intelligence applications.
Private equity funds associated with Blackstone Energy Transition Partners plan to acquire the Hill Top Energy facility in Carmichaels, Pennsylvania, about 50 miles south of Pittsburgh, according to the company. The seller is Paris-based investment firm Ardian. The companies did not provide an estimated closing date for the transaction.
Data center developers are scrambling to identify sources of electric power to fuel the surge of demand from technologies that run AI. Some new data center developments are adjacent to power plants, such as the Elon Musk-led xAI project that is lined up next to a Tennessee Valley Authority facility in Memphis, Tennessee.
Blackstone invested in Potomac Energy Center in Loudoun County, Virginia, earlier this year and is involved in financing several additional power projects associated with data centers. In July, Blackstone, widely considered the world's largest owner of commercial real estate, announced it would invest $25 billion in power and data center infrastructure in Pennsylvania.
The 620-megawatt Hill Top is located on property along the Monongahela River. It opened in 2021 and "is one of the newest and most efficient combined cycle gas turbine plants in the country with among the best-in-class operating performance," Blackstone said in a news release. Since opening, Hill Top has been used to support data center development and other uses in Pennsylvania, Maryland and New Jersey.
Ardian owns the Hill Top property through one of its Ardian Americas Infrastructure Funds.
For the record
Santander and Houlihan Lokey were financial advisers to Blackstone, and Kirkland & Ellis was legal counsel. Solomon Partners and Macquarie Capital were advisers to Ardian, and Gibson Dunn was counsel.