Natural Gas Pipeline Giant Energy Transfer Poised to Benefit From Surging AI Data Center Demand
HOUSTON, TX - November 16, 2023 – Energy Transfer (ET) is strategically positioned to capitalize on the explosive growth of artificial intelligence (AI) data centers, potentially fueling continued dividend increases for investors.The company, a major player in natural gas transportation, is witnessing a surge in connection requests from power plants and data centers seeking to tap into its extensive pipeline network, particularly in states experiencing rapid AI infrastructure progress.
Energy Transfer has been steadily increasing its distribution - its dividend - on a quarterly basis since 2021. However, much of that growth has been a recovery from 2020, when the company considerably reduced its payout. Rising natural gas demand is crucial for ET to maintain this momentum, and the company is actively responding to growing needs.
Earlier this year, Energy Transfer secured an agreement with cloudburst to supply natural gas to datacenter development in Texas. Co-CEO Mackie McCrea noted in February that the company had proactively positioned itself near key data center locations,stating,”It’s almost as if Energy Transfer was working years ago to figure out where the best spots are for these data centers,because,if you look at them,the vast majority of them are within several miles of our pipeline.”
This foresight is now paying off. In August, Energy Transfer announced a $5.3 billion expansion of its Transwestern Pipeline,designed to enhance natural gas supply to Arizona and New Mexico,regions anticipating ample data center growth. Moreover, the company’s September investor presentation revealed requests to connect over 60 power plants across 14 states and approximately 200 data centers in 15 states to its network.