Natural Gas Midstream Players Draw Attention as AI Data Center Power Demand Grows

Rising electricity demand from artificial intelligence data centers is turning a spotlight on U.S. natural gas infrastructure, and two of the sector’s largest midstream operators — Energy Transfer (ET) and Williams Companies — are frequently weighed against each other as potential beneficiaries of the buildout.

Midstream companies own the pipelines, processing plants, and storage assets that move natural gas from producing basins to power generators and utilities. As utilities evaluate new gas-fired capacity to serve data center load, throughput volumes and long-term supply contracts become key variables for these infrastructure operators.

Energy Transfer, one of the largest diversified midstream partnerships, holds a market capitalization of roughly $74.65 billion. Its units traded at $21.68 in recent action, up 0.84% from a prior close of $21.50. The partnership’s footprint spans multiple shale basins, giving it access to both Permian supply and demand hubs, including the Gulf Coast.

Williams Companies, meanwhile, operates the Transco pipeline, a major artery running from Texas through the Southeast and Mid-Atlantic — corridors where much of the projected data center load growth is concentrated. That geographic positioning is a central element of comparisons between the two companies, since proximity to demand centers can support firm transportation contracts and expansion projects.

Separately, smaller-cap natural gas names also saw movement. Natural Gas Services Group (NGS), which provides compression equipment to producers, traded at $37.72, up 2.15% from a prior close of $36.93. The company’s market capitalization stands near $486.6 million. Compression is a critical upstream component of the gas value chain, as producers rely on it to move volumes into gathering systems and ultimately to end markets.

Industry observers note that the data center theme affects the natural gas value chain at multiple points: upstream producers need drilling and compression services, while midstream operators need pipeline capacity and processing to deliver incremental volumes to power plants. The pace at which utility gas demand materializes — and how quickly pipeline expansions are sanctioned — remains the central question for the group.

Neither Energy Transfer nor Williams has publicly quantified direct data center-linked volumes in a way that allows simple comparison, and much of the near-term narrative rests on project announcements, contract signings, and utility capacity plans rather than current financial results.

What to watch

• Upcoming quarterly earnings calls from Energy Transfer and Williams, where management commentary on data center-related demand and pipeline expansion projects is expected.
• Announcements of new gas-fired generation capacity or supply agreements tied to data center developments in Transco and Energy Transfer service territories.
• Updates on open seasons or binding commitments for pipeline expansion projects, which signal contracted future volumes.
• Federal Energy Regulatory Commission filings related to major pipeline capacity additions.

Source: original release