(Bloomberg) -- If there’s one thing that’s exciting pipeline companies this earnings season, it’s the ‘tremendous’ gas demand they’re expecting from the growing use of artificial intelligence and data center needs.
Utilities are bracing for the largest increase in power demand in a generation due to data centers for AI, computer-chip factories and a growing number of electric vehicles. Some of that additional power will come from wind and solar. But a significant portion will be from gas-fired plants. And companies that run data centers want to make sure that gas will be available — and quickly obtainable — when they need it.
“We have never seen this level of activity from a demand pull standpoint, and these opportunities are truly spread across our natural gas footprint,” Energy Transfer LP Co-Chief Executive Officer Thomas Long said in a call with analysts Wednesday evening.
The pipeline giant has been asked to connect to about 45 power plants it currently does not serve, he said. It also has had requests from more than 40 prospective data centers in 10 states. Many of the developers are working on the best locations to build and want information on how close pipelines are and how expensive it would be to connect to them, he said.
Competitor Williams Cos. is engaged in a lot of detailed discussions about power needs, including with states wanting to make sure they get enough power, CEO Alan Armstrong said on a call with analysts Thursday. Discussions have become “more concrete” than they were at the start of the year, he said.
Last week, Kinder Morgan Inc. Chairman Richard Kinder said on a quarterly call that demand from AI and data centers will be “tremendous.” The company also expects strong growth from liquefied natural gas exports and gas shipments to Mexico.
“In my decades of experience in the mid-term arena, I’ve never seen a macro environment so rich with opportunities for incremental build-out of natural gas infrastructure,” Kinder said on the call.
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