Goldman predicts that natural gas pipelines will benefit from the data center boom

Are you looking to invest in the booming data center industry? Look no further than Kinder Morgan and Williams Companies, the two largest pipeline operators in the U.S. poised to benefit from the rising demand for natural gas.

According to Goldman Sachs, the surge in electricity consumption from data centers could increase natural gas demand by 3.3 billion cubic feet per day by 2030, representing a 10% increase over the current 35 bc/d consumed in the U.S. for electric power generation. This increase in demand is expected to drive $7.4 billion in pipeline investments to boost capacity by 6.1 bcf/d through 2030.

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Goldman Sachs analysts have identified Kinder Morgan and Williams Companies as the best-positioned natural gas infrastructure operators to capitalize on this growth in data center power demand. Kinder Morgan, with a 40% share of natural gas pipelines in the U.S. and a strong presence in Texas, and Williams Companies, holding a 33% market share and exposure in the Southeast, are expected to see significant earnings upside over the next few years.

Additionally, EQT Corp., the largest natural gas producer in the U.S., is well-positioned to benefit from the increase in power demand from data centers. With its cost advantages and inventory, EQT Corp. is expected to capture a meaningful share of the gas demand.

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