Natural Gas Distribution NAICS 221210

Sep 23, 2025 - Data Centers Create Opportunities for Midstream Gas Industry

• North American midstream companies are investing in natural gas infrastructure to support the rapid expansion of data centers, according to Fitch Ratings. These projects offer diversification benefits by reducing reliance on traditional industrial and residential gas demand, though they remain a small portion of overall operations. Data centers are projected to drive substantial energy demand growth, potentially adding several billion cubic feet per day of gas consumption by 2030. Companies including Energy Transfer, TC Energy, and Kinder Morgan have launched targeted pipeline projects in gas-producing regions, backed by long-term contracts and commercial commitments. While some data center operators have made commitments to renewable energy sources, natural gas is currently the fastest route to scalable, reliable power for data infrastructure.
• In September, US Energy Secretary Chris Wright said the European Union could completely phase out Russian gas within six to twelve months by replacing it with imported liquified natural gas (LNG) from the US, according to Reuters. In Brussels, Wright met EU energy commissioner Dan Jorgensen to discuss ending EU imports of Russian natural gas. EU states are negotiating a legal framework to phase out Russian oil and gas by January 2028. However, Secretary Wright believes the EU could wean itself off Russian fuels much sooner. The US has increased pressure on Europe to stop buying Russian oil and gas, sales of which have been used by Russia to fund the war in Ukraine.

• Rising electricity demand and the high costs of building new natural gas and renewable energy capacity will likely increase the time it takes to phase out coal-fired plants, according to a Wood Mackenzie report released in July. While electricity generated by coal plants is more expensive than gas, solar, and power storage, development costs for new gas-fired capacity have doubled in recent years. Meanwhile, long-duration energy storage from solar and wind isn’t mature enough to support baseload power. Costs for solar and wind development are also rising amid tariffs, reshoring, and infrastructure project delays. Wood Mackenzie estimates coal-fired electricity generation may peak in 2030, four years later than the consulting firm’s base case forecast.
• Pipeline firm Kinder Morgan recently reported a 24% rise in second-quarter profits compared to a year earlier. The company’s jump in profitability comes as pipeline operators are enjoying steady growth, driven primarily by liquified natural gas (LNG) exports, and rising demand for electricity. Kinder Morgan says its $93 billion project backlog is mostly in support of power generation. The firm’s pipelines transport about 40% of the country’s natural gas production.