July 2025, Vol. 252, No. 7
Editor's Notebook
Wanted: More Pipelines as AI Data Centers Drive Gas Demand
By Michael Reed, Editor-in-Chief
(P&GJ) — It’s no secret at this point that data centers, especially those supporting AI and cloud computing, burn a lot of power.
So much, in fact, that Goldman Sachs Research forecasts global power demand from data centers will increase 50% by 2027 and by as much as 165% by the end of the decade.
Globally, that would represent a total increase to 945 terawatt-hours, according to energy policy provider International Energy Agency (IEA), about the same amount needed to power Japan.
That being the case, it only makes sense that the centers’ operators, confronted by grid connection delays and stiff completion for power, are increasingly shopping around for their own direct pipeline connections to provide onsite natural gas-fired generation.
Facing grid connection delays and competition for power, some data center operators are experiencing five to seven year waits for a grid hookup.
Speaking at P&GJ’s Energy Pipelines Program in March, Glenn Koch, vice president-Project Execution at Williams, pointed to data centers as one of the primary drivers of increased gas demand.
“Data centers are a crazy thing,” he remarked. “In their world, speed is king, and they are investing at dollar levels that dwarf what the oil and gas industry would invest to serve them.”
With tech giants such as Google, Amazon, Microsoft and Meta rapidly expanding their data operations, these companies often find themselves needing hundreds of megawatts of power on short timelines.
“They [tech giants] called the power generators and said, ‘Hey, I’m going to build a data center in Virginia, in Ohio, in Texas, and I need 400 megawatts, please,’ and the answer was, ‘Well, you want that in eight years or 10 years?’ And the answer was, ‘I want that in two years,’” Koch explained.
And when traditional power generators cannot keep up, these companies turn to natural gas suppliers like Williams. In response, Koch said, Williams has begun developing power-generation solutions specifically for data centers, integrating gas supply and power production.
Williams recently announced its first major power generation project dedicated to a data center, which involves the construction of large-scale 250-megawatt power-generation facilities, designed to support energy-intensive data centers.
The infrastructure will provide 500 megawatts of power generation across two sites. The entire city of San Antonio consumes 900 megawatts.
Additionally, Kinder Morgan is reportedly engaging in commercial discussions concerning the generation of over 5 Bcf/d, with 1.6 Bcf/d related to power demand at data centers.
East Daley Analytics’ recently identified about 7 gigawatts of data center load capacity within 50 miles of the El Paso Natural Gas (EPNG) pipeline footprint, which extends across the Southwestern United States and into Mexico. About 5.5 gigawatts of that is located at the end of the South Mainline in Arizona.
Major projects, like Oracle’s and Meta’s multi-gigawatt AI data centers in Texas and Louisiana, are directly tied to the availability and expansion of gas pipeline infrastructure.
The anticipated surge in gas demand has led midstream companies to make significant capital commitments to pipeline extensions and new buildouts across the country.
Pipeline operators are actively working with data center developers to build laterals, directly connecting data centers or new gas-fired power plants to the main pipeline network.
These laterals, often shorter than 50 miles long, are increasingly viewed as a fast, practical solution to meet urgent data center power needs, especially where grid interconnection is delayed or constrained.
In regions like Virginia, North Carolina, South Carolina and Georgia, more than 3.3 Bcf/d of new pipeline capacity has been proposed or is under construction specifically to serve growing data center and utility demand. Additionally, data center construction is clustering in regions with already dense existing pipeline infrastructure, such as Texas, Louisiana and Oklahoma.
With companies such as Enbridge and Energy Transfer, along with those mentioned earlier, openly pointing to the significance of data centers in the marketplace, it follows that in areas where data centers are being sited, lateral pipeline work is bound to follow.
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