Enerflex Ltd. (NYSE:EFXT) shares advanced 5% in pre-market trading on Tuesday after the company announced a contract to supply more than one gigawatt (GW) of lower-emission natural gas-fired power generation equipment for a data centre development in North America.
The contract expands Enerflex’s presence in the market for dedicated power infrastructure supporting artificial intelligence and digital computing facilities.
Combined with previously announced projects, including approximately 450 megawatts (MW) disclosed on 1 October 2026, the new agreement increases the company’s backlog of behind-the-meter natural gas-fired power generation projects to more than 1.75 GW.
Deliveries associated with the backlog are scheduled to extend through 2028.
The newly awarded contract falls within Enerflex’s Engineered Systems business and covers the design, engineering, fabrication and assembly of natural gas-fired power generation units.
The equipment will be deployed at a North American data centre development, providing dedicated electricity generation capacity.
The project will use a behind-the-meter configuration, allowing power to be supplied directly to the facility without requiring a connection to the conventional electricity grid for the generation system.
Such arrangements can support large industrial and computing facilities that require substantial and reliable power supplies.
Enerflex described the equipment as lower-emission natural gas-fired generation technology, although the announcement did not specify emissions performance figures or comparisons with alternative generation systems.
The company also did not disclose the financial value of the contract, the identity of the customer or the precise location of the data centre.
Enerflex said its backlog of behind-the-meter natural gas-fired power generation projects now exceeds 1.75 GW.
The total includes the latest contract for more than 1 GW of capacity and previously announced awards, including approximately 450 MW disclosed earlier in October.
The backlog represents contracted work that the company expects to execute over the coming years.
Deliveries are expected to continue through 2028, providing a schedule of future manufacturing and project execution activity.
The increase reflects growing demand for dedicated electricity generation infrastructure as developers expand data centre capacity.
However, the company did not provide a detailed breakdown of the backlog’s financial value or expected revenue recognition by year.
The timing and profitability of individual projects will depend on manufacturing schedules, execution costs and contractual terms.
To support delivery of its expanding project backlog, Enerflex has authorised approximately $100 million of investment in its Engineered Systems facilities and capabilities.
Of this amount, $15 million is included in the company’s capital expenditure guidance for 2026.
The investment programme is intended to strengthen the manufacturing and operational resources required to execute large-scale power generation contracts.
Enerflex said the projects will be delivered through its North American manufacturing operations.
The planned spending comes as the company expands its role in supplying modular power infrastructure for energy-intensive facilities.
The announcement did not provide a detailed allocation of the remaining investment or specify the timetable for all planned expenditures.
Enerflex linked the growth in its power generation backlog to demand from artificial intelligence and digital infrastructure developments.
Large data centres require substantial electricity supplies to operate computing equipment, networking systems and cooling infrastructure.
Behind-the-meter generation can provide an alternative source of power for facilities seeking dedicated capacity without depending on a conventional grid connection for that generation.
Paul Mahoney, President and Chief Executive Officer of Enerflex, highlighted the demand for these systems.
“The demand for reliable, prime power that does not require grid connection, supporting artificial intelligence and digital infrastructure development, continues to grow,” Mahoney said.
“Our success securing over 1.75 gigawatts of backlog highlights Enerflex’s unique capabilities in providing an integrated design, engineering, full-scale fabrication, and project execution solutions for behind-the-meter power generation projects.”
The comments underline management’s focus on supplying integrated power generation systems for large infrastructure developments.
Enerflex said its growing power generation backlog could create opportunities beyond the initial delivery of equipment.
These include commissioning, installation and aftermarket services associated with the generation units.
The company also identified potential demand for digital support through its ReliaCore Asset Performance Management ecosystem.
Asset performance management systems can help operators monitor equipment, assess operating conditions and manage maintenance requirements.
Such services may provide additional business opportunities over the operating lives of the installed power generation systems.
However, Enerflex did not quantify the potential value of these future services or confirm that separate agreements have been secured.
The opportunities will depend on customer requirements and subsequent contractual arrangements.
Enerflex provides modular natural gas, power generation and treated water technology solutions to customers across its operating markets.
The company employs approximately 4,500 people globally.
Its Engineered Systems business supports the development and delivery of equipment and infrastructure for energy-related applications.
The latest contract extends its activities in the data centre power generation market, where developers are seeking electricity supplies capable of supporting large computing installations.
The combination of equipment design, engineering, manufacturing and project execution allows Enerflex to participate in multiple stages of power infrastructure development.
The company’s planned manufacturing investment is intended to support this growing workload.
Enerflex’s latest contract represents a significant expansion of its behind-the-meter power generation business.
The award for more than 1 GW of capacity increases the company’s backlog to over 1.75 GW, with deliveries extending through 2028.
The company has also authorised approximately $100 million of investment in its Engineered Systems operations, including $15 million already reflected in its 2026 capital expenditure guidance.
For investors, the larger backlog provides visibility into future project activity, although the financial contribution will depend on contract execution, delivery schedules and operating margins.
Potential commissioning, installation and aftermarket services could create further opportunities following equipment delivery.
Enerflex shares rose 5% in pre-market trading after the announcement, reflecting a positive initial market reaction to the contract and expanded backlog.
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