Net Power signs $20 million deposit agreement to add 123 MW of gas generation capacity to Project Permian

Net Power Inc. announced Monday it signed a deposit and exclusivity agreement to acquire 123 MW of new gas-fired generation equipment for Project Permian, its planned one-gigawatt power development in West Texas. The Houston-based company paid a $20 million deposit under the deal, which would bring the potential first-phase capacity of the project to nearly 200 MW.

Net Power secures 123 MW equipment deal for Project Permian

The deposit and exclusivity agreement covers a third party’s engineering, procurement, and construction position, along with associated power generation equipment rights for an approximately 123 MW gas-fired project. Net Power paid a $20 million deposit upfront—that amount gets credited toward the total purchase price at closing.

A separate cost-reimbursement agreement with a prospective end customer adds another layer of financial protection. Under that arrangement, the customer covers certain costs Net Power incurs while procuring the new equipment. CEO Danny Rice described the two agreements together as providing “the opportunity to secure and deliver more power sooner with appropriate financial protections.”

On the commercial side, Net Power says it’s actively advancing discussions with prospective power offtakers, both directly and through a financial advisor.

The new deal stacks on top of two modular gas turbine generator sets Net Power already has under contract, carrying a nominal gross capacity of approximately 68 MW combined. Together, the two positions bring potential first-phase capacity at Project Permian to nearly 200 MW—a real step toward the project’s one-gigawatt total target.

Why Net Power is pursuing conventional gas generation now

This pivot to conventional gas generation wasn’t always part of the plan. Net Power built its identity around a patented power generation system designed to produce electricity from natural gas while capturing virtually all atmospheric emissions. That technology is now indefinitely shelved.

The company announced its recalibrated commercial strategy in August 2026, alongside its second-quarter results. It’s a direct response to what Rice says power customers are actually asking for right now.

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

Carbon capture isn’t gone for good. Net Power says it preserves the option to layer it in during future phases, contingent on customer requirements, project economics, and available financing—but not now. The company still believes carbon capture and sequestration will play an integral role in the future of natural gas power.

Impact on Project Permian timeline and capacity targets

Project Permian was originally designed to reach one gigawatt of capacity in West Texas, developed in phases. Net Power had been targeting a phase-1 final investment decision in 2026. That milestone has slipped.

According to a regulatory filing accompanying the company’s Q2 results, Net Power no longer expects to sanction phase 1 this year, and no start-up timeline has been set either. For a development-stage firm that had been working toward a concrete near-term milestone, that’s a notable shift.

Rice framed the 123 MW equipment agreement as more than a one-off transaction—a template the company hopes to replicate. The idea is a repeatable mechanism to secure additional generation capacity for early deployment at Project Permian. If the model holds, Net Power could use similar deposit-and-exclusivity structures to keep stacking capacity without committing to full construction financing upfront. The 68 MW already under contract, combined with the 123 MW now under deposit, gives the company a clearer path toward a meaningful first-phase build even without a formal final investment decision in place.

Net Power’s financial position and broader project pipeline

Net Power ended the second quarter of 2026 with $117.93 million in cash and cash equivalents. Total current assets stood at $312.91 million, against current liabilities of just $17.58 million. That balance sheet gives the company room to maneuver as it pursues equipment agreements and advances commercial discussions.

New York-listed and operating as a development-stage firm, Net Power hasn’t yet generated revenue from a commercial power project. Financial runway matters here because Project Permian—and any future sites—will require significant capital before they produce a return.

On the commercial side, Net Power says it’s actively advancing discussions with prospective power offtakers, both directly and through a financial advisor. Those conversations cover Project Permian and other sites beyond West Texas. Details about those locations, or how far along the talks are, haven’t been disclosed.

Customers are demanding speed, reliability, and scale

Net Power’s $20 million deposit agreement secures 123 MW of gas-fired generation equipment from a third party’s EPC position. Combined with the 68 MW already under contract, that brings potential first-phase capacity at Project Permian to nearly 200 MW, with a cost-reimbursement agreement from a prospective end customer offsetting some of the procurement costs.

The company has indefinitely shelved its proprietary carbon-capture technology in favor of conventional natural gas generation, pointing to customer demand for speed, reliability, and scale. A phase-1 final investment decision, previously targeted for 2026, is no longer expected this year, and no start-up timeline has been announced.

Net Power heads into this phase of development with over $117 million in cash and has framed the latest equipment deal as a replicable structure for building out capacity further. Carbon capture remains a stated future option—just not a current commitment.

Kelly Lippke

Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.