Natural gas midstream operators are securing long-term contracts with hyperscalers to power AI infrastructure, driving record distributable cash flows and growth targets for WMB, EPD, and ET.
Williams is building gas projects for Meta and raised its long-term EBITDA growth target above 11%, indicating strong data center demand.
Enterprise Products Partners reported record distributable cash flow of $2.3 billion and 82% fee-based contracts, making it a stable beneficiary of gas demand.
Energy Transfer's distributable cash flow jumped 32% year over year and it raised distributions for the 19th consecutive time, showing strong momentum.
Chevron is supplying gas to Microsoft's Project Kilby, positioning it as a key energy partner for AI-driven power demand.
Meta is contracting directly for natural gas power for its data centers, highlighting its growing energy needs.
Microsoft signed a 20-year gas agreement with Chevron for a co-located power plant, showing its commitment to securing energy for AI infrastructure.
NVIDIA's CEO states energy is the constraint, not compute, which underscores the importance of power for AI growth but does not directly affect NVIDIA's fundamentals.
Tech giants including Meta and Microsoft are bypassing utility queues to secure direct natural gas power for AI data centers. This shift is fueling record cash flows for midstream operators like Williams, Enterprise Products Partners, and Energy Transfer, which are leveraging existing pipeline infrastructure to meet surging electricity demand.
Tech companies like Meta and Microsoft are facing multiyear wait times for utility grid interconnections and are instead building co-located gas power plants to ensure reliable energy for AI data centers.