Kalina Power (ASX: KPO) has entered into a multi-year framework agreement with purpose-built artificial intelligence (AI) cloud platform development specialist Crusoe to collaborate on 170-megawatt near-zero-emissions natural gas power plants using carbon capture and sequestration.

The company, through its wholly owned Canadian subsidiary Kalina Distributed Power (KDP), has signed a joint development agreement for Crusoe’s industry-first AI data centre projects co-sited with KDP’s natural gas power plants.

According to the International Energy Agency, investment in new data centres – driven by growing digitalisation and the uptake of AI – has surged over the past two years and is expected to continue accelerating.

Data centre footprint

Kalina managing director Ross MacLachlan said the new agreement supports the establishment of Crusoe’s data centre footprint and complies with Alberta’s self-supply requirements.

“Our team has worked closely with Crusoe to develop a commercial path forward to keep pace with AI data centre market demand while capitalising on the unique characteristics of the Alberta market to deliver reliable, affordable natural gas-fired power configured with CO₂ capture and sequestration,” Mr MacLachlan said.

“This agreement establishes a framework under which up to three projects can be initially developed [and] provides the potential for additional power plants at all three locations, as well as provisions for the parties to jointly develop future prospective sites.”

“Furthermore, it outlines the potential for Crusoe to contract via virtual power purchase agreements on KDP projects that are not co-sited with Crusoe.”

Affordable power

The two companies expect Crusoe to own and operate its AI data centres, contracting for affordable power with Kalina’s plants via power purchase agreements of at least 15 years’ duration with an investment-grade or otherwise creditworthy counterparty.

KDP’s potential project locations are strategically located near electrical transmission, gas pipeline infrastructure, carbon sequestration hubs and fibre optic lines.

The initial three project locations are presently comprised of KDP’s Myers Energy Park, the Alsike Energy Park and the newly secured Crossfield Energy Park location.

Each of the plants represents gross unlevered CapEx of approximately $1.12 billion, or around $714 million net of cash rebate incentives.