Goldman Sachs said the two largest U.S. pipeline operators are expected to benefit from the data center boom as growing natural gas demand requires billions of dollars in infrastructure investments. According to Goldman Sachs forecasts, the surge in data center power consumption may increase natural gas demand by 3.3 billion cubic feet per day by 2030, an increase of approximately 10% from the current US power generation consumption of 35 BC per day. The investment bank said the additional demand is a solid tailwind for Kinder Morgan and Williams, especially as the pipeline needs to expand. To meet the needs of power users, the data center boom could drive $7.4 billion in pipeline investments to increase capacity by 6.1 bcf/d by 2030. The report outlines the impact of data center expansion. Goldman Sachs currently rates Kinder Morgan a “buy” with a price target of $20, an 8% increase from Friday’s closing price of $18.57. The investment bank has a neutral stance on Williams Companies, with a price target of $37, down 4% from the previous closing price of $38.67. KMI WMB YTD line kmi v. wmb Pipeline operators’ earnings could grow 2% by 2027 than Goldman Sachs currently forecasts, as they are well-positioned in terms of scale and geography to “account for an estimated portion of our new pipeline capacity additions” meaningful percentage”. Goldman Sachs said Kinder Morgan has a 40% share of U.S. natural gas pipelines and an important position in Texas, which is expected to become a data center hotspot. With a market share of 33%, Williams Companies has a strong presence in the Southeast, including the nation’s largest data center market in northern Virginia. Goldman Sachs said Kinder Morgan could see earnings before interest, taxes, depreciation and amortization rise by $490 million by 2030, while Williams Companies could see earnings rise by $410 million. On the production side, EQT is expected to capture a sizeable share of natural gas demand thanks to its cost advantage and inventory, Goldman Sachs said. The company is the largest natural gas producer in the United States, accounting for about 6% of total production. EQT YTD line eqt “We believe that increased data center power demand and the subsequent impact on load growth may result in demand for incremental natural gas generation, and we believe EQT will benefit from its competitive position as an industry leader in the United States,” The Goldman Sachs team said. Goldman Sachs gave EQT a buy rating and a price target of $43, up about 7% from Friday’s closing price of $40.27. —CNBC’s Michael Bloom contributed to this report.
