Kodiak Gas Services (NYSE:KGS) saw its shares rise 4% Wednesday morning following the announcement of a multi-year strategic agreement with Baker Hughes (NASDAQ:BKR) to provide gas turbine power generation capacity aimed at supporting growth in U.S. data center markets.
The arrangement sets a deployment framework for up to 1.8 GW of generation capacity. Under the initial equipment award, the companies said they expect to deliver roughly 1 GW of gas turbines and generator sets by 2030. That initial tranche is intended to support behind-the-meter power solutions for data centers and related energy infrastructure projects.
Equipment specified in the order includes NovaLT16 gas turbines, Frame 5 gas turbines and BRUSH Power Generation generators. Company statements note these assets will be deployed in U.S. markets where rising electricity demand and grid constraints are creating a need for more flexible power infrastructure.
The agreement is structured as a multi-year, rolling framework designed to provide flexibility so capacity commitments can be aligned with data center demand and project development timetables. Kodiak and Baker Hughes said the framework aims to foster closer commercial and technical collaboration, help streamline project execution and shorten lead times for deploying power infrastructure.
Mickey McKee, President and CEO of Kodiak Gas Services: "Our customers require dependable, efficient and rapidly deployable power solutions, and access to Baker Hughes’ industry-leading technology, training and support enhances our ability to meet that demand at scale."
Lorenzo Simonelli, Chairman and CEO of Baker Hughes: The agreement reflects a growing need for flexible power generation technologies as demand for power accelerates, driven by expansion of digital infrastructure and data centers.
Beyond equipment supply, the agreement includes commitments around technical training and provision of spare parts. The companies also noted a mutual interest in negotiating a long-term services arrangement for the installed equipment, though the firms described that as an area of continued discussion rather than a finalized contract.
This strategic framework targets markets where operators face constrained grid capacity and require on-site, flexible generation to support data center loads. Kodiak’s share response Wednesday morning reflected investor recognition of the potential revenue and execution pathway that the rolling agreement could enable.