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Data Center Boom Drives Natural Gas Use: Will WMB, ENB & KMI Gain?
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Key Takeaways
AI data centers are driving massive electricity demand due to high-performance computing & storage needs.
KMI says about 60% of its $10B project backlog is tied to power demand, partly from data centers.
ENB sees about 50 potential data center-related projects needing up to 10 Bcf of natural gas daily.
With the demand for data processing increasing due to the rapid expansion of artificial intelligence (AI) applications, data centers are facing unprecedented energy challenges. Natural gas is emerging as a pivotal solution in the power strategies of these facilities, offering the reliability, scalability and economic viability needed to support continuous and intensive data processing operations.
Integrating natural gas with renewable energy sources allows data centers to balance sustainability goals with operational efficiency, positioning natural gas as a cornerstone of the future energy landscape for this sector. Analysts and investors have noted that leading natural gas and oil pipeline companies are already addressing the rising electricity demand driven by AI-powered data centers on their recent earnings calls.
Major energy companies like The Williams Companies Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan Inc. (KMI - Free Report) are well-positioned to benefit from this AI-driven trend.
Why AI Data Centers are Power-Hungry
AI data centers have become significant electricity consumers due to several key factors. Firstly, deep learning and other AI workloads require immense computational power. High-performance processors, such as graphics processing units and tensor processing units, are essential to handle the billions of calculations needed for training large neural networks. This computational intensity drives up electricity usage substantially.
Secondly, data storage systems, particularly those designed for high-speed access and redundancy, represent another major source of energy consumption. These storage systems are critical for rapidly retrieving and processing large datasets, but they also require substantial power to operate efficiently.
Finally, the heat generated by high-performance processors necessitates robust cooling systems to maintain optimal operating temperatures and avoid hardware damage. These cooling systems, while essential, add another layer of electricity consumption, further contributing to the overall energy demands of AI data centers.
Natural Gas Pipeline Players on the Radar
As the adoption of AI data centers accelerates, the electricity demand is expected to grow substantially, putting considerable pressure on existing transmission grids. To accommodate this rising demand, utilities may be compelled to invest in new natural gas power plants, which would increase the need for midstream infrastructure, such as expanded pipeline networks, to ensure a reliable supply of natural gas to these facilities. This dynamic could create new opportunities for investment in both power generation assets and the associated midstream infrastructure needed to support this growing energy consumption.
WMB’s Massive Gas Network to Meet Data Center-Power Demand
The Williams Companies is focused on the expansion of its natural gas infrastructure to meet heightened energy demand from data centers. The company has a vast network of pipelines that can carry a significant proportion of natural gas consumed in the United States, and hence are also fueling data centers.
Data Center Boom Powers KMI’s Project Backlog
Kinder Morgan is experiencing a notable rise in natural gas demand, fueled by the expansion of data centers and AI applications. On the fourth-quarter 2025 call, KMI mentioned that it included slightly higher than $900 million in its project backlog, raising its total backlog to $10 billion. Of the total $10 billion, KMI mentioned that roughly 60% of this backlog is associated with meeting power demand, a proportion of which should be coming from the data centers.
Data Center Power Demand Driving ENB’s New Growth Opportunities
Enbridge expects strong growth opportunities from the rising demand for power from data centers. The company has mentioned 50 potential projects associated with data centers on its fourth-quarter 2025 call. ENB said the key developments that could get sanctioned by this year and next year will likely require up to 10 billion cubic feet of natural gas daily.
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Data Center Boom Drives Natural Gas Use: Will WMB, ENB & KMI Gain?
Key Takeaways
With the demand for data processing increasing due to the rapid expansion of artificial intelligence (AI) applications, data centers are facing unprecedented energy challenges. Natural gas is emerging as a pivotal solution in the power strategies of these facilities, offering the reliability, scalability and economic viability needed to support continuous and intensive data processing operations.
Integrating natural gas with renewable energy sources allows data centers to balance sustainability goals with operational efficiency, positioning natural gas as a cornerstone of the future energy landscape for this sector. Analysts and investors have noted that leading natural gas and oil pipeline companies are already addressing the rising electricity demand driven by AI-powered data centers on their recent earnings calls.
Major energy companies like The Williams Companies Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan Inc. (KMI - Free Report) are well-positioned to benefit from this AI-driven trend.
Why AI Data Centers are Power-Hungry
AI data centers have become significant electricity consumers due to several key factors. Firstly, deep learning and other AI workloads require immense computational power. High-performance processors, such as graphics processing units and tensor processing units, are essential to handle the billions of calculations needed for training large neural networks. This computational intensity drives up electricity usage substantially.
Secondly, data storage systems, particularly those designed for high-speed access and redundancy, represent another major source of energy consumption. These storage systems are critical for rapidly retrieving and processing large datasets, but they also require substantial power to operate efficiently.
Finally, the heat generated by high-performance processors necessitates robust cooling systems to maintain optimal operating temperatures and avoid hardware damage. These cooling systems, while essential, add another layer of electricity consumption, further contributing to the overall energy demands of AI data centers.
Natural Gas Pipeline Players on the Radar
As the adoption of AI data centers accelerates, the electricity demand is expected to grow substantially, putting considerable pressure on existing transmission grids. To accommodate this rising demand, utilities may be compelled to invest in new natural gas power plants, which would increase the need for midstream infrastructure, such as expanded pipeline networks, to ensure a reliable supply of natural gas to these facilities. This dynamic could create new opportunities for investment in both power generation assets and the associated midstream infrastructure needed to support this growing energy consumption.
3 Midstream Stocks to Gain: WMB, KMI & ENB
Three midstream energy majors that investors should keep an eye on are The Williams Companies, Enbridge and Kinder Morgan. All the stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
WMB’s Massive Gas Network to Meet Data Center-Power Demand
The Williams Companies is focused on the expansion of its natural gas infrastructure to meet heightened energy demand from data centers. The company has a vast network of pipelines that can carry a significant proportion of natural gas consumed in the United States, and hence are also fueling data centers.
Data Center Boom Powers KMI’s Project Backlog
Kinder Morgan is experiencing a notable rise in natural gas demand, fueled by the expansion of data centers and AI applications. On the fourth-quarter 2025 call, KMI mentioned that it included slightly higher than $900 million in its project backlog, raising its total backlog to $10 billion. Of the total $10 billion, KMI mentioned that roughly 60% of this backlog is associated with meeting power demand, a proportion of which should be coming from the data centers.
Data Center Power Demand Driving ENB’s New Growth Opportunities
Enbridge expects strong growth opportunities from the rising demand for power from data centers. The company has mentioned 50 potential projects associated with data centers on its fourth-quarter 2025 call. ENB said the key developments that could get sanctioned by this year and next year will likely require up to 10 billion cubic feet of natural gas daily.